JPMorgan Chase (JPM) earnings Q1 2023

JPMorgan Chase posted record first-quarter revenue that beat analysts’ expectations as net interest income rose nearly 50% year over year on higher interest rates.

Here’s what the company reports:

• Adjusted earnings: $4.32 per share vs. $3.41 per share Refinitiv estimate
• Revenue: $39.34 billion versus $36.19 billion

Shares of the bank rose 6.1% in premarket trading.

“The US economy remains on a generally healthy footing — consumers are still spending and their balance sheets are strong, and businesses are in good shape,” CEO Jamie Dimon said in the release.

“However, the storm clouds that we have observed over the past year remain on the horizon and the turmoil in the banking industry is compounding those risks,” he said, adding that banks are likely to rein in lending if they become more conservative ahead of a possible one downturn.

JPMorgan, the largest US bank by assets, is being closely watched for clues as to how the industry has fared following the collapse of two regional lenders last month.

Analysts expect a mixed bag of conflicting trends. For example, JPMorgan likely benefited from an influx of deposits after Silicon Valley Bank and Signature Bank experienced fatal bank runs.

But the industry has been forced to pay deposits as customers switch their holdings to higher-yielding instruments like money market funds. That will likely dampen banks’ gains from rising interest rates as the Federal Reserve tries to tame inflation.

Deposit flow from US financial institutions is the top concern for analysts and investors this quarter. That’s because smaller banks came under pressure last month as customers sought the perceived safety of megabanks like JPMorgan and JPMorgan Bank of America. But the bigger picture could be that deposits are leaving the regulated banking system altogether, as customers realize they can earn higher returns outside of checking and savings accounts.

Another key question will be whether JPMorgan and others will tighten lending standards ahead of an expected US recession that could limit economic growth this year by making it harder for consumers and businesses to borrow money.

Banks have started accumulating more loan loss provisions on expectations of a slowing economy later this year, which could weigh on results. According to the StreetAccount estimate, JPMorgan is expected to post a $2.27 billion provision for credit losses.

Wall Street might be of little help this quarter as investment banking fees are likely to remain low thanks to the still-closed IPO market. CFO Jeremy Barnum said in February that investment banking revenue was down 20% from a year earlier and that trading was also trending “a little bit worse.”

Finally, analysts will want to hear what Dimon has to say about the economy and his expectations for the regional banking crisis. JPMorgan has played a key role in supporting a client bank, First Republicwhich faltered last month, in part by efforts to inject $30 billion in deposits into it.

JPMorgan’s shares are down about 4% this year, outpacing the 31% drop in the KBW Bank Index.

Wells Fargo And Citigroup are scheduled to release results later on Friday while Goldman Sachs and Bank of America report Tuesday and MorganStanley announces results on Wednesday.

This story evolves. Please check again for updates.