JPMorgan Chase Exceeds Expectations in Earnings Report for Q3 2023

JPMorgan Q3 2023

JPMorgan reported earnings per share (EPS) at $4.33 for the quarter, higher than the estimated $3.86. The bank also said its profit jumped to $13.15 billion, 35% higher than figures reported the year before. Company revenue also hit $40.69 billion, higher than the $39.63 estimate from the London Stock Exchange Group (LSEG).

In addition, JPMorgan also beat estimates for total deposits, at $2.38 trillion over $2.37 trillion, in addition to an 18% return on equity over the estimated 16%. The company’s return on tangible common equity came in at 22% over the 19.7% estimated, while book value per share was $100.30 and tangible book value per share was $82.04.

JPMorgan’s Q3 non-interest expenses were at $21.76 billion, lower than the estimated $21.78 billion. Also, the company’s provision for credit losses was $1.38 billion, much less than the estimated $2.49 billion. Overall, the adjusted revenue for Q3 2023 came in at $40.69 billion, higher than the $39.92 billion.

As of this writing, JPMorgan stock is at $147.33 in premarket trading, a 1.06% increase on its previous close of $145.81. According to MarketWatch Data, JPM has gained 0.49% over the last 5 days but lost more than 2% in the past 1 month and 3 months, respectively. On the other hand, JPM has gained 8.73% year-to-date (YTD) and 31.14% over the last year.

JPMorgan Q2 and Revenue Target

JPMorgan Chase also exceeded expectations when it released figures last quarter. With most of the increase from increased interest income and rates, the bank recorded a total revenue of $42.4 billion for Q2 2023. Unfortunately, this is lower than the Q3 figure. Also, the Q2 adjusted EPS, at $4.37, was higher than recorded in Q3. Net income for Q2 also increased 67%, or 40% excluding the First Republic acquisition, to $14.5 billion.

In May, JPMorgan increased its key revenue target for 2023 at an investor presentation. The company put the target at $84 billion, $3 billion more than the previous guidance in April. JPMorgan increased the revenue target shortly after it acquired First Republic Bank. At the time, there were concerns that bigger banks acquiring smaller ones might make the big ones a little too powerful. JPMorgan Chase is the world’s largest bank by market capitalization and total assets. As of August 2023, the bank’s valuation is $424.72 billion.

Despite JPMorgan’s strength, major banks are feeling the effect of the continuous interest rate hikes the Federal Reserve has initiated to tackle inflation. Banks now have to shore up deposits because customers are moving money to money market funds and other high-yield products. To prepare for a fallout, JPMorgan and other banks have begun to earmark funds to fix loss from loans.

In August, JPMorgan expanded its stake in Brazilian digital bank C6. The company now owns 46% of C6, over the previous 40%. JPMorgan first purchased a stake in June 2021, and has added more now that C6 has 25 million customers, 8 million more than recorded at the initial investment. Neither bank disclosed specific financial terms.