JPM’s Q1 Earnings Top on Solid Trading & Higher Loans, Provisions Soar

Solid trading performance, impressive growth in credit card and wholesale loans and decent investment banking (IB) performance drove JPMorgan’s (JPM Quick QuoteJPM – Free Report) 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.

JPMorgan’s Credit Quality Weakens

Provision for credit losses was $3.31 billion, soaring 75% from the prior-year quarter. Our estimate for the metric was $2.45 billion.

Net charge-offs (NCOs) grew 19% to $2.33 billion. Also, as of March 31, 2025, non-performing assets (NPAs) were $9.11 billion, rising 10%.

JPM’s Capital Position Solid

Tier 1 capital ratio (estimated) was 16.5% at the first-quarter end, up from 16.4% in the prior-year quarter level. Tier 1 common equity capital ratio (estimated) was 15.4%, up from 15%. Total capital ratio was 18.2% (estimated), stable year over year.

Book value per share was $119.24 as of March 31, 2025, compared with $106.81 a year ago. Tangible book value per common share was $100.36 at the end of March 2025, up from $88.43.

Update on JPMorgan’s Share Repurchases

During the reported quarter, JPMorgan repurchased 30 million shares for $7.6 billion.

Our Viewpoint on JPM

New branch openings, strategic acquisitions, a global expansion plan, relatively high interest rates and decent loan demand are likely to keep supporting JPMorgan’s revenues. However, poor asset quality and mounting expenses are concerns. Further, the current macroeconomic environment is expected to create headwinds for the company in the near term.
 

JPMorgan currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Dates & Expectations of JPM’s Peers

Bank of America (BAC Quick QuoteBAC – Free Report) is slated to report first-quarter 2025 numbers on April 15.

Over the past month, the Zacks Consensus Estimate for Bank of America’s quarterly earnings has been revised 1.3% upward to 81 cents. This indicates 2.4% decline from the prior-year quarter.

Citigroup (C Quick QuoteC – Free Report) is also scheduled to announce first-quarter 2025 results on April 15.

Over the past 30 days, the Zacks Consensus Estimate for Citigroup’s quarterly earnings has moved 21% downward to $1.84. This implies a 16.5% growth from the prior-year quarter.