JPMorgan Chase’s second-quarter profit more than doubled as the release of billions of dollars earmarked to cover potential loan losses, along with deal advising fees, offset a slowdown in trading activity and a lack of loan demand. .
The largest US bank reported earnings of $11.9 billion, or $3.78 per share, up from $4.7 billion or $1.38 per share in the same period last year. Analysts had forecast earnings of $3.13 per share, according to consensus data gathered by Bloomberg.
Revenue of $31.4 billion surpassed analysts’ forecasts of $30 billion, but fell from $33.8 billion a year earlier.
Profits were flattered by the $3 billion release earmarked to cover potential losses from the economic impact of the Covid-19 pandemic, which have not materialized.
Prior to the earnings statement, one of the central questions for JPMorgan was the bank’s outlook for loan growth and net interest income, which measures the difference between what banks pay in deposits and what they earn on loans and other assets. Both measures were weighed down by government stimulus and a flattening yield curve.
Loans at JPMorgan’s consumer and community banking division were down 3 percent as a result of higher mortgage prepayments and lower balances in the credit card business, CEO Jamie Dimon said.