'Economy Is Facing Considerable Turbulence:' JPMorgan Chase CEO Jamie Dimon Cautions About 'Negatives Of Tariffs And Trade Wars'

JPMorgan Chase & Co. JPM shares traded higher premarket after the company reported its first-quarter FY24 results, but they eventually gave up all the gains and traded in the red.

Reported revenue rose 8% year-on-year (Y/Y) to $45.3 billion. Net revenue (managed) was $46.0 billion (+8% Y/Y), beating the consensus of $44.1 billion.

Consumer & Community Banking (CCB) revenue rose 4% Y/Y to $18.3 billion, and Commercial & Investment Bank (CIB) revenue was $19.7 billion (+12% Y/Y) in the quarter.

Investment Banking revenue was $2.3 billion, up 2% Y/Y, in the quarter. Investment Banking fees rose 12% Y/Y to $2.2 billion, led by higher debt underwriting and advisory fees.

Asset and Wealth Management revenue was $5.73 billion (+12% Y/Y), and Corporate revenue stood at $2.30 billion (+5% Y/Y) in the quarter.

In AWM, Assets under management stood at $4.1 trillion, and client assets stood at $6.0 trillion (up 15%), driven by higher market levels and continued net inflows.

Net interest income rose 1% year over year to $23.4 billion in the quarter. Net interest income excluding Markets stood at $22.6 billion, down 2% year over year due to lower rates and deposit margin compression, along with lower deposit balances in CCB. 

Noninterest revenue was $22.6 billion, up 17% Y/Y, in the quarter. Noninterest revenue, excluding Markets, increased 20% Y/Y to $13.8 billion.

Excluding the $588 million First Republic-related gain, noninterest revenue excluding Markets was up 14%, led by higher asset management fees in AWM and CCB, increased investment banking fees and lower net investment securities losses. Noninterest expense upped 4% Y/Y to $23.6 billion in the quarter.

Markets revenue was $9.7 billion, up 21% Y/Y, primarily driven by higher Equity Markets revenue.

Average loans rose 1% Y/Y and down 1% quarter-over-quarter (Q/Q); average deposits were down 2% Y/Y and flat Q/Q.

In CCB, Debit and credit card sales volume increased by 7% year over year, and active mobile customers were up 8% year over year. In CIB, Market revenue rose 21% year over year, with Fixed-Income Markets increasing 8% year over year and Equity Markets up 48% year over year in the quarter.

JPM's provision for credit losses was $3.3 billion (+75% Y/Y), including net charge-offs of $2.3 billion and a net reserve build of $973 million. 

Net income rose 9% Y/Y to $14.6 billion in the quarter. EPS of $5.07 exceeded the consensus of $4.62. The company witnessed a First Republic-related gain of $588 million in Corporate ($0.16 increase in EPS).

The CET1 capital ratio stood at 15.4%, and the advanced CET1 capital ratio was 15.5%. The bank's capital distributions included a dividend per share of $1.40 and $71 billion of common stock net repurchases.

Outlook: JPMorgan expects FY25 net interest income, excluding Markets, of ~$94.5 billion and project card services NCO rate of ~3.60%.

Jamie Dimon, Chairman and CEO, said, "In CCB, the franchise continued to acquire new customers at a robust pace, opening 500,000 net new checking accounts and adding record first-time investors in wealth management. Finally, AWM had healthy AUM net inflows of $90 billion, and investment performance remained strong."

"The economy is facing considerable turbulence (including geopolitics), with the potential positives of tax reform and deregulation and the potential negatives of tariffs and "trade wars," ongoing sticky inflation, high fiscal deficits and still rather high asset prices and volatility," he added.

Price Action: JPM shares are down 0.84% at $225.20 premarket at the last check Friday.

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