JPMorgan shares fall after shortfall in Q1 net interest income

JPMorgan Chase & Co. announced first-quarter net interest income (NII) slightly below analyst estimates and raised its expense guidance for the year, leading to a decline in shares.

The firm recorded $23.1 billion in NII for the first three months of 2024, representing an 11% increase from the previous year, as stated on Friday.

According to Bloomberg News, despite maintaining an expectation of approximately $90 billion in revenue from this pivotal source for the year, it revised its guidance, excluding the markets business, to approximately $89 billion. Adjusted expenses for the year could now reach around $91 billion, surpassing earlier forecasts.

  • “Many economic indicators continue to be favorable. However, looking ahead, we remain alert to a number of significant uncertain forces,” Chief Executive Officer Jamie Dimon said in the statement. He cited the wars, growing geopolitical tensions, persistent inflationary pressures and the effects of quantitative tightening.
  • “We do not know how these factors will play out, but we must prepare the firm for a wide range of potential environments to ensure that we can consistently be there for clients,” he said.

Friday’s results come as investors seek to assess the Federal Reserve’s interest-rate trajectory, particularly after an inflation reading Wednesday came in higher than expected. Dimon has been warning for months that inflation could be stickier than markets predict and wrote in his annual shareholder letter on Monday that his firm is prepared for interest rates ranging from 2% to 8% or even more.

Shares of JPMorgan, up 14.9% this year through Thursday, fell about 4% in early trading in New York.

JPMorgan also reported a surprise $72 million net reserve release, while analysts had predicted a $556 million build.

The biggest US bank took a $725 million charge for an additional Federal Deposit Insurance Corp. assessment tied to a pair of bank failures last year.

Investment-banking revenue came in at $2 billion, above analyst expectations. Markets revenue fell 5%, less than expected with both equity and fixed-income trading beating estimates.

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