JPMorgan Tops Estimates, as Dimon Says Trade War Could Weigh on Confidence

The souring outlook on lending and other businesses has weighed on the companies’ stocks. The S&P 500 Financials Index fell for a record 13 straight days in June. It dropped 3.6 percent in the second quarter, the worst performance since the first three months of 2016.

JPMorgan posted net income of $8.3 billion in the three months that ended in June, which was the most the bank has ever earned during a second quarter.

“When you look at the year-on-year comparisons, everything looks excellent,” said Chris Kotowski, an analyst at Oppenheimer & Co. “Despite all the bears’ hand-wringing” about having to pay more for deposits, the benefits of rising interest rates are clear, he said.

Higher rates helped boost net interest income by 10 percent from a year earlier to $13.5 billion and enabled the investment bank to boost revenue in its treasury and security services businesses by 12 percent each.

Revenue from investment banking increased 13 percent to $1.95 billion, helped by gains in merger advice and equity-underwriting fees. Analysts had expected revenue at the unit to fall 4 percent.

Shares of JPMorgan fell 0.9 percent to $105.94 at 10:04 a.m. in New York. The stock was little changed this year through Thursday.

Here’s a summary of JPMorgan’s results:

• Net income rose 18 percent to $8.32 billion, or $2.29 a share, from $7.03 billion, or $1.82, a year earlier. That beat the $2.22 average estimate of 22 analysts surveyed by Bloomberg.
• Non-interest expense increased 8 percent as compensation costs rose 7 percent.
• Net interest margin, the difference between what a bank charges borrowers and pays depositors, fell 2 basis points from the previous three-month period to 2.46 percent.