JPMorgan profit rises on higher interest income as First Republic lifts earnings
FILE PHOTO: JPMorgan Chase Bank is seen in New York City, U.S., March 21, 2023. REUTERS/Caitlin Ochs
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(Reuters) -JPMorgan Chase posted a 67% jump in profit for the second quarter on Friday as it earned more from borrowers’ interest payments and benefited from the purchase of First Republic Bank (OTC:FRCB).
Shares of the largest U.S. lender rose 2.4% to $152.49 in premarket trading as it kicked off second-quarter results for the big U.S. banks.
JPMorgan (NYSE:JPM)’s profit climbed to $14.47 billion, or $4.75 per share, for the quarter ended June 30. That compares with $8.65 billion, or $2.76 per share a year earlier.
The bank bought a majority of failed First Republic Bank’s assets in a government-backed deal in May after weeks of industry turbulence.
That bolstered its net interest income (NII), which measures the difference between what banks earn on loans and pay out on deposits.
The bank’s NII jumped $21.9 billion, up 44%, or up 38% excluding First Republic. JPMorgan said it expects 2023 net interest income of about $87 billion.
“The U.S. economy continues to be resilient,” CEO Jamie Dimon said in a statement.
“Consumer balance sheets remain healthy, and consumers are spending, albeit a little more slowly. That being said, there are still salient risks in the immediate view” such as consumers using up their cash buffers, high inflation, quantitative tightening the war in Ukraine, he said.
