JPMorgan Chase Profits Soar 52% Despite Banking Turmoil

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JPMorgan Chase & Co. made 52% more money this quarter from making loans to customers. The bank had a lot of extra business since two other banks, Silicon Valley Bank and Signature Bank, stopped working last month. As a result, it got more deposits in its accounts too.

JPMorgan, Citigroup and Wells Fargo all have strong financial results, meaning that there don’t seem to be any issues in the banking system of the biggest banks.

Recently, a lot of people paid attention to the bank’s reports or earnings announcements. They were looking carefully for any sign that there might be some kind of economic problem in the United States banking system. Fortunately, Octavio Marenzi from consulting company Opimas LLC said that nobody found that type of sign when they looked at the results.

JPMorgan, the biggest bank in America made a profit of $12.62 billion this quarter. This is almost twice what was earned last year in the same period. It also beat analysts’ expectations with each person getting around $4.10 for each share they had.

Most of the extra profits this time came from higher interest rates which gave them an income of $20.8 billion, becoming 49% more from last year’s amount.

JPMorgan’s deposits increased to $2.4 trillion in the last quarter, which was an increase of $37 billion from before. A lot of people and businesses were spending money they had saved during the pandemic and taking cash out of smaller banks which made their big bank deposits go down. But when two small banks failed in March, a lot of people and businesses moved their money into larger banks because it’s safer as they are often “protected” by the government.

JPMorgan Chief Financial Officer Jeremy Barnum said that recently a lot of people are opening new business and company bank accounts, which caused money to be deposited into the bank, rather than taken out like it had been for a few months before. Because of this, analysts from UBS wrote “What crisis?” in their report about JPMorgan, Wells and PNC’s results.

JPMorgan and its CEO Jamie Dimon are known for being quick to solve banking issues. When Silicon Valley Bank and Signature Bank failed, JPMorgan was asked to help First Republic Bank from becoming the next one to fail. The group of banks put in $30 billion of deposits that weren’t insured into First Republic which allowed them time to fix their balance sheet and possibly find a buyer.

The economy of the United States is in good condition right now. People have money to spend and businesses are doing okay. But there are still worries about the future, especially because of all the problems banks have been having. That’s what Mr Dimon said in a statement.

JPMorgan is making a lot of money because more people are choosing to use their credit cards rather than save their money. 13% more people used their credit cards now compared to the same time last year and some of them even keep a balance on it, which means that JPMorgan earns not only from processing the transactions but also from the interest of the outstanding amount.

Business at the bank isn’t really going anywhere because many people and companies don’t want to make big decisions because there’s too much inflation. Earnings from giving advice or help is the same, but earnings from buying and selling stocks and bonds have gone down. JPMorgan shares rose more than 6%, so that’s a good sign.