JPMorgan Chase Beats Q3 Estimates with Strong Net Interest Income, Raises Full-Year Guidance

JPMorgan Chase (JPM.US) released its Q3 2024 earnings report today ahead of the Wall Street session, revealing better-than-expected profits and strong net interest income growth. The shares gained 1.6% in pre-market trading. The largest U.S. bank by assets is likely to see positive market reaction due to its strong performance and increased full-year guidance, despite preparing for higher loan losses. JPMorgan reported better-than-expected Q3 results in several key areas, including managed net interest income, adjusted revenue, and EPS. The bank's investment banking fees grew 31%, while market revenue rose 8%. JPMorgan's total assets under management reached $3.90 trillion, exceeding analysts' expectations. The implied one day move for the company based on historical data was 3.28%, with an average surprise of 8.89% above consensus for adjusted EPS.

Highlights

• Net income of $12.9 billion, exceeding expectations but down 2% year-over-year
• Managed net interest income reached $23.53 billion, beating estimates
• Adjusted revenue of $43.32 billion, surpassing expectations
• EPS of $4.37, above the consensus estimate of $3.98
• Assets under management grew to $3.90 trillion, exceeding estimates
• Full-year 2024 net interest income guidance raised to ~$91.5 billion

Analyst expectations Source: Bloomberg

JPMorgan Chase Q3 2024 Results

• Managed net interest income: $23.53 billion vs $22.8 billion expected
• Adjusted revenue: $43.32 billion vs $41.9 billion expected
• EPS: $4.37 vs $3.98 expected
• Net income: $12.9 billion vs $12.1 billion expected (-2% YoY)
• Total loans: $1.34 trillion vs $1.33 trillion expected
• Total deposits: $2.43 trillion vs $2.4 trillion expected

Segment Breakdown

• Consumer & Community Banking revenue: $17.8B (-3% YoY)
• Commercial & Investment Bank revenue: $17.0B (+8% YoY)
• Investment Banking revenue: $2.4B (+29% YoY)
• Markets & Securities Services revenue: $8.37B (+8% YoY)
• Asset & Wealth Management revenue: $5.44B (+9% YoY)

Other Key Metrics

• Provision for credit losses: $3.11 billion vs $2.94 billion expected
• Net charge-offs: $2.09 billion vs $2.37 billion expected
• Return on equity: 16% vs 14.5% expected
• Return on tangible common equity: 19% vs 17.5% expected
• Standardized CET1 ratio: 15.3% vs 15.1% expected
• Book value per share: $115.15 vs $113.80 expected

Additional Notes

• JPMorgan raised its 2024 net interest income guidance to ~$91.5 billion, up from the previous ~$91 billion
• The bank set aside $3.1 billion for potential loan losses, more than double its provisions in Q3 2023
• Investment banking fees grew 31%, while markets revenue increased by 8%
• The bank expects Q4 2024 net interest income to decline slightly to $22.9 billion
• JPMorgan has cautioned that it may have been "overearning" on lending profits
• The Federal Reserve's potential policy easing cycle could impact future net interest income

Source: xStation