JPMorgan Chase and Goldman Sachs beat analysts’ expectations

[ad_1]

Big banks book big profits as customers ride out the pandemic and deal makers take advantage of crowded markets.

JPMorgan Chase, the nation’s largest bank by assets, on Tuesday reported net income of $11.9 billion in the second quarter, up from $4.7 billion a year earlier. Its earnings per share of $3.78 and revenue of $30.5 billion exceed analysts’ expectations.

The bank said consumers are starting to spend more on travel and entertainment, and are buying homes and cars at a faster pace. Investment banking fees were the highest ever, buoyed by a hot market for mergers and acquisitions.

“Consumer and wholesale balance sheets remain exceptionally strong as the economic outlook continues to improve,” JPMorgan CEO Jamie Dimon said in a statement.

The company’s confidence in the recovery was reflected in the release of $3 billion from its rainy fund set aside for an expected onslaught of consumer defaults that never appeared, thanks to strong government stimulus efforts that have helped keep many Americans afloat. Dimon said net discounts, or debt that the bank forgoed, fell 53 percent, “reflecting the growing health of our customers and clients.”

Goldman Sachs also reported a larger profit for the quarter than the same period last year, generating nearly $5.5 billion on revenue of approximately $15.4 billion. On a stock basis, Goldman’s bid of $15.02 was well above Wall Street expectations of $9.88. Analysts expected Goldman to make a profit of only $3.4 billion.

But compared to the first three months of 2021, its profits were lower, indicating that banks and Wall Street competitors may have come to the end of the frenzied trading period brought on by the pandemic.

Goldman’s trading returns for the quarter were lower than they were earlier this year and the same period last year. Its trading in fixed income, commodities and other financial products brought in $4.9 billion in revenue for the quarter, compared to about $7.6 billion earlier this year and $7.2 billion during the same period last year. Analysts expected a better offer, predicting the bank would get just over $5 billion from such deals.

[ad_2]