Jamie Dimon’s hoping for the best, but as ever, his bank’s prepared for the worst. Overprepared even. Lest you should forget, Dimon lives by “fortress principles.”
That extensive preparedness is one, among many, reasons Jamie suspects the government’s well-meaning regulatory efforts might be superfluous and counterproductive. If you ask him, he’ll tell you all about it. (Don’t ask him, though. Not about that.)
JPMorgan’s results were fine. If you think being a banker is something to be proud of, Dimon remains the paragon. All he’s lacking is a monocle, a pocket watch, a mustache and a top hat.
Most notably, net interest income at JPMorgan rose in Q3 both sequentially and YoY. It was the first quarter-to-quarter increase since Q4 2023. $23.53 billion was easily ahead of the $22.8 billion consensus.
The bank now sees $92.5 billion of NII for the full year, up from $91 billion previously. The implication is that NII will be $22.9 billion in Q4.
In two words (or three if you unpack the contraction): That’ll work. A NII beat and raise always works, but it was particularly welcome here. Early last month, the shares had a very bad day when Daniel Pinto decided it’d be a good idea to tell the Street that NII forecasts for next year (around $90 billion) weren’t “reasonable” considering the likely path for rates. (Maybe just lie next time, Daniel.)
The other standout was IB. Revenue there was $2.35 billion, a beat. As the fee breakdown (shown below) illustrates, IB inflected at the beginning of the year, and the momentum, such as it is, was sustained last quarter. Advisory was the strongest in nearly two years, and at $850 million it was an easy beat (consensus was $755 million).
Equity underwriting still looked weak, but debt underwriting topped a billion for the third consecutive quarter, blowing past estimates in the process. We’re still a long way from the halcyon days of the 2021 stimmy go-go, but things are looking up.
The bank’s traders did ok too. Equities was a solid beat, rising 27% YoY to $2.62 billion versus $2.37 billion seen. FICC was flat from a year ago, but at $4.53 billion, managed to top expectations.
The provision, at $3.11 billion, was higher than anticipated, but not by a lot. Charge-offs were well below expectations at $2.09 billion, and they fell sequentially. On the top and bottom lines, adjusted revenue of $43.32 billion was a beat and EPS of $4.37 was too.
All in all, these numbers were fine. More than fine, probably. It’s always difficult to judge bank earnings by the market reaction on the day they’re released, so I’d caution against the temptation to over-interpret Friday’s price action.
Dimon said the US economy “remains resilient,” but warned on “several critical issues, including large fiscal deficits, infrastructure needs, restructuring of trade and remilitarization of the world.” He described the geopolitical environment as “treacherous and getting worse.”
JPMorgan, Dimon went on, is “hop[ing] for the best.” But just in case, he and the bank (and at this point, those two things are synonymous such that I sometimes worry one will cease to exist without the other) are “prepared for any environment.”
