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Solid trading performance, impressive growth in credit card and wholesale loans and decent investment banking (IB) performance drove JPMorgan’s JPM first-quarter 2025 earnings of $5.07 per share. The bottom line handily surpassed the Zacks Consensus Estimate of $4.62.
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This included the First Republic Bank ("FRC")-related gain of $588 million. Excluding this one-time gain, earnings were $4.91 per share.
Shares of this banking giant gained almost 1.3% in pre-market trading in response to the better-than-expected results.
Behind JPMorgan’s Headline Numbers
As expected, markets revenues soared 21% to $9.7 billion. Specifically, fixed-income markets revenues grew 8% to $5.8 billion, while equity trading numbers surged 48% to $3.8 billion. Our estimates for fixed-income and equity markets revenues were $5.85 billion and $3.1 billion, respectively.
Among other positives, Consumer & Community Banking (CCB) average loan balances were up 1% year over year. Also, debit and credit card sales volume increased 7%.
Further, mortgage fees and related income witnessed a modest 1% rise to $278 million. We had projected the metric to be $398.6 million. Moreover, the company recorded a 1% rise in net interest income (NII), driven by higher yields and 4% growth in total loans. Management expects NII to be approximately $94.5 billion for this year, aided by Markets NII.
Additionally, the IB business performance was less impressive than previously expected. Advisory fees and debt underwriting fees rose 16% each. On the contrary, equity underwriting fees fell 9%. Overall, total IB fees (in the Commercial & Investment Bank segment) were up 12% from the prior-year quarter to $2.25 billion.
On the other hand, the company reported a massive jump in provision for credit losses in the quarter. This was because of the economy “facing considerable turbulence (including geopolitics).”
During the quarter, operating expenses witnessed a rise. Management affirmed an adjusted non-interest expense target of roughly $95 billion for this year, up from $91.1 billion in 2024.
JPM’s Revenues Jump, Expenses Rise
Net revenues, as reported, were $45.31 billion, up 8% year over year. The top line outpaced the Zacks Consensus Estimate of $43.23 billion.
NII rose 1% year over year to $23.27 billion. This was attributable to higher revolving balances in Card Services, a rise in wholesale deposit balances and the impact of the balance sheet mix, partly offset by lower rates, a fall in deposit balances in the Consumer & Community Banking segment and deposit margin compression. Our estimate for NII was $23.31 billion.
Non-interest income jumped 17% to $22.04 billion. It included the $588 million FRC-related gain. Our estimate for non-interest income was $19.3 billion and did not include the above-mentioned FRC-related gain.
Non-interest expenses (on a managed basis) were $23.6 billion, up 4%. This was mainly due to higher compensation expenses. We had projected non-interest expenses to be $23.78 billion.
The performance of JPMorgan’s business segments, in terms of net income generation, was decent. The Commercial & Investment Bank, Asset & Wealth Management and Corporate segments witnessed a rise in net income on a year-over-year basis. On the other hand, the Consumer & Community Banking segment incurred losses. Overall, net income grew 9% to $14.64 billion. We had projected net income to be $12.98 billion.
