JPMorgan posts record profit on big gains from dealmaking, stock trading

By Manya Saini and Nupur Anand

July 14 (Reuters) – JPMorgan Chase reported a record second-quarter profit on Tuesday, as a wave of big-ticket IPOs and dealmaking helped drive investment banking fees to their highest levels since 2021, while its trading desk capitalized on volatile markets.

Revenue rose across all business units at the bank. Investment banking rode a sharp rebound in the U.S. IPO market, led by Elon Musk’s SpaceX, which roared into the market with the largest listing in history. JPMorgan was among the lead underwriters on the deal.

“This strength is being supported by several tailwinds, including AI-driven capital investment, fiscal stimulus and the benefits of more efficient regulation,” JPMorgan CEO Jamie Dimon said in a statement.

Shares of JPMorgan were up nearly 3% in early hours of trade after falling in pre-market trading as the bank raised its forecast for 2026 expenses to $107.5 billion from $105 billion.

With its market value now at more than $920 billion, the lender is edging closer to joining Wall Street’s elite trillion-dollar club.

“We view the quarter as generally positive … though investors may balance these benefits against the higher expense outlook and uptick in deposits cost,” Jefferies analyst David Chiaverini said.

The largest U.S. lender posted a profit of $21.2 billion, or $7.70 per share, in the three months ended June 30, compared with $14.99 billion, or $5.24 per share, a year earlier.

Profit was boosted by a $4.6 billion gain tied to its stake in Visa. Markets revenue, which houses trading operations, surged 35% over the prior year.

On an adjusted basis, its profit of $6.14 per share beat expectations of $5.85, according to estimates compiled by LSEG.

“The report is fine … It’s landing on a day when the tape is pretty sloppy,” said Art Hogan, chief market strategist at B Riley Wealth.

INTEREST INCOME FORECAST GETS A BUMP

Net interest income, excluding markets, rose 4% from a year earlier to $23.7 billion in the quarter, while average loans climbed 10%.

It raised its 2026 forecast for interest income to $96.5 billion, excluding markets, from $95 billion. Interest income, including markets, is expected to rise to $105.5 billion this year, compared with $103 billion earlier.

Although banks have continued to describe consumers as resilient, the health of lower-income borrowers remains a key focus as higher interest rates and still-elevated living costs pressure household finances.

Dimon said several risks are in focus, including geopolitical tensions and wars, sticky inflation, large global fiscal deficits and elevated asset prices.

The results of large lenders such as JPMorgan Chase and Bank of America are seen as a barometer of the U.S. economy, as they offer insight into consumer spending, borrowing and business activity.

Investors are also closely watching succession planning at JPMorgan. Dimon plans to remain CEO for at least three more years, Reuters reported last month, citing a source.

The bank’s leadership reshuffle in June elevated Doug Petno and Troy Rohrbaugh to co-presidents and marked the retirement of Marianne Lake, long viewed by Wall Street as a leading contender to succeed Dimon.

Revenue at the consumer and community banking business – now under the stewardship of Rohrbaugh – climbed 8% in the second quarter.

Dimon said on Tuesday that the timetable for his departure as CEO of the largest U.S. bank remains unchanged.

“The timing is essentially the same, obviously completely up to the board,” he told analysts on a post-earnings conference call.

INVESTMENT BANKING WINDFALL

JPMorgan’s investment banking fees jumped 30% in the second quarter from a year earlier, higher than the bank’s earlier estimate.

The bank was part of several landmark transactions during the quarter, including as co-adviser on NextEra Energy’s $67 billion merger with Dominion Energy and lead active bookrunner on Alphabet’s $85 billion equity offering.

It also retained the top spot in global investment banking league tables, generating the highest investment banking revenue in the industry, according to Dealogic data.

The value of global mergers and acquisitions announced so far this year has surpassed $3 trillion, according to Dealogic data, adding momentum to one of banks’ biggest fee-generating businesses: advising on deals.

JPMorgan’s equity trading revenue surged 86%, while fixed-income trading revenue increased 6%.

Rival Goldman Sachs and Bank of America also posted higher profits on Tuesday, thanks to strength in trading and dealmaking. Wells Fargo’s profit was boosted by higher interest income.

AI AND JOBS

The bank has already built 1,000 use AI use cases across risk functions, marketing, hedging, note taking, idea generation, note taking among others.

Dimon said that there are areas where the bank has reduced job by 30% to 40% due to AI, however, most employees were able to find jobs within the company.

(Reporting by Manya Saini in Bengaluru and Nupur Anand in New York; Additional reporting by Johann M Cherian; Editing by Anil D’Silva)