JPMorgan Chase & Co. Experiences 31% Profit Surge in Q2 2013
Last Friday, July 12, JPMorgan Chase & Co. announced a 14% revenue increase since the start of 2013. The contrast between this year’s and last year’s second quarter performance is even more dramatic—$6.5 million in Q2 2013 compared to $4.96 million Q2 2012. Last year’s cost per share was $1.21; this year’s was $1.60. All told, that is a 31% increase from last year. The bank’s 14% revenue growth translates to $25.2 billion. Financial analysts predicted the profit surge, but were a bit low in their estimate. They believed that JPMorgan’s revenues would hit $24.9 billion, a number just short of the company’s actual second quarter profits.
According to JPMorgan CEO, Jamie Dimon, the banking institution’s growth can be attributed primarily to its investment banking interests. Investment banking profits jumped 19% to $2.8 billion. As Dimon explained, the increase can be credited to underwriting debt, stock offerings, and increased client deposits. Dimon noted that client deposits were up 10% from last year and credit card sales were also 10% greater, peaking at $105.2 billion.
Not all of the banking institution’s services grew, however. Dimon cited loan growth as the slowest area of development. New Business Loan Originations fell 26% compared to this same time last year. Mortgage loans and revenues were down 14% compared to last year, but this decrease is less surprising given a recent jump in mortgage interest rates. Commercial banking also declined 8% from where it was in July 2012.
Dimon, spoke about the growth within JPMorgan and its greater significance for the world of investment banking and financial services in NYC and throughout the U.S. Dimon sees his company’s profit surge as a sign that the economic tide is steadily turning, albeit slowly. Dimon characterized areas of slow growth and decline for JPMorgan as the result of cautious borrowers who remain uncertain about future economic growth. Financial analysts anticipate that borrower anxiety will soon wane; they have already predicted a stronger second half of the year for loan growth. If their ability to predict profit surges like the one just experienced by JPMorgan holds true, then the second half of the year holds great promise. MBA graduates involved in NYC-based finance have new reason for anticipation and excitement as do other MBA students who will soon join the highly globalized NYC marketplace.
