JPMorgan Profit More Than Doubles, but Revenue Falls

But income fell 8% to $30.48 billion from $33.08 billion a yr in the past, the results of depressed lending margins and decrease buying and selling income. Analysts had anticipated $29.97 billion in income, in keeping with FactSet.

The divergence between revenue and income is essentially because of the extraordinary circumstances of the second quarter of 2020, when the coronavirus pandemic appeared poised to decimate the economic system. Then, JPMorgan set aside $10.47 billion to arrange for a wave of mortgage defaults. This quarter, the financial institution continued to liberate pandemic loan-loss reserves, releasing one other $3 billion and boosting its backside line.

The second quarter will possible show to be an in-between interval for giant banks like JPMorgan. Companies that boomed all through the pandemic, particularly trading and investment banking, are slowing down from document paces. Company shoppers that final yr nervously rushed to boost cash are now flush with cash. Final yr’s market chaos, which may be perfect for buying and selling, has quieted now that the U.S. has gotten the pandemic beneath management.

Income fell 19% in JPMorgan’s company and funding financial institution and was up 3% in its client financial institution.

Mortgage balances grew 3% however with rates of interest nonetheless close to zero, the financial institution’s lending income fell once more.

Web curiosity earnings, the quantity the financial institution collects in curiosity on loans minus what it pays for deposits, fell 8%.

Web charge-offs, or loans the financial institution not expects to be repaid, had been down from a yr in the past.

JPMorgan shares are up 24% this yr and hit an all-time excessive in June. The inventory was down 1% premarket on Tuesday. Traders have broadly bet on the banking industry for publicity to the financial restoration.

Within the company and funding financial institution, buying and selling income was $6.79 billion, falling 30% from a blockbuster quarter a yr in the past however higher than executives had forecast. Funding banking charges rose 25%. Inventory underwriting income rose 9%, and debt underwriting rose 26%. Charges from advising on mergers and acquisitions rose 52%.

Spending on JPMorgan client bank cards elevated 51% within the quarter, however debtors are nonetheless paying down card debt shortly. The financial institution mentioned spending on each bank cards and debit playing cards surpassed pre-pandemic ranges, together with in classes like journey and leisure.

Traders and analysts are eagerly studying indicators of a revival in mortgage development, which they consider indicators the subsequent stage of the financial restoration.

The business financial institution posted a $1.42 billion revenue, swinging from a loss on loan-loss reserves a yr in the past. The asset and wealth administration unit’s revenue rose 74% to $1.15 billion.

Write to David Benoit at david.benoit@wsj.com