Jamie Dimon, Chairman and CEO of JPMorgan Chase & Co., during a Bloomberg Television interview at the JPMorgan Global High Yield and Leveraged Finance Conference in Miami, Florida, U.S., Monday, March 6, 2023.
Mark Bello | Bloomberg | Getty Images
JPMorgan Chase is expected to release its first-quarter results before the opening bell on Friday.
Here’s what Wall Street expects:
- Earnings: $3.41 per share, up 29.7% from a year earlier, according to Refinitiv.
- Revenues: $36.24 billion, 14.7% more than a year earlier.
- Deposits: $2.31 trillion, according to StreetAccount.
- Provision for credit losses: $2.27 billion.
- Trading revenue: fixed income $5.29 billion, equities $2.86 billion.
JPMorgan, the largest U.S. bank by assets, will be watched closely for clues about how the industry fared after two regional lenders collapsed last month.
Analysts expect a mix of contradictory trends. For example, JPMorgan likely benefited from an influx of deposits after Silicon Valley Bank and Signature Bank experienced fatal bank runs.
But the sector has been forced to repay deposits as customers shift their holdings to higher-yielding instruments like money market funds. This will likely dampen banks’ gains as interest rates rise as part of the Federal Reserve’s efforts to control inflation.
The flow of deposits through US financial institutions is the top concern for analysts and investors this quarter. Indeed, smaller banks came under pressure last month as customers sought the perceived security of megabanks, including JPMorgan and Bank of America. But overall, deposits are leaving the regulated banking system as a whole as customers realize they can earn higher returns outside of checking and savings accounts.
Another key question will be whether JPMorgan and others tighten lending standards ahead of an expected U.S. recession, which could constrain economic growth this year by making it harder for consumers and businesses to borrow money. .
Banks have started to build up more loan loss provisions on expectations of a slowing economy later this year, which could weigh on results. JPMorgan is expected to post a provision for credit losses of $2.27 billion, according to StreetAccount’s estimate.
Wall Street could provide little help this quarter, with investment banking fees expected to remain subdued thanks to the still-closed IPO market. Financial Director Jeremy Barnum said in February that investment banking revenue was heading for a 20% decline from a year earlier, and that exchanges were also trending “a bit worse.”
Finally, analysts will want to hear what JPMorgan CEO Jamie Dimon has to say about the economy and his expectations for the evolution of the regional banking crisis. JPMorgan played a pivotal role in supporting a client bank, First Republicwhich faltered last month, in part leading efforts to inject it with $30 billion in deposits.
JPMorgan shares are down about 4% this year, outpacing the 31% drop in the KBW banking index.
Wells Fargo And Citigroup are expected to release results later Friday, while Goldman Sachs and the Bank of America report on Tuesday and Morgan Stanley announces its results on Wednesday.
This story is developing. Please check for updates.