JPMorgan Chase & Co. posted a nearly fivefold increase in quarterly earnings thanks to booming markets and an economic recovery that enabled it to release $ 5.2 billion in resources it had set aside to cover soured loans.
The country’s largest bank reported record quarterly earnings of $ 14.3 billion, or $ 4.50 a share, well above the $ 3.10 a share predicted by analysts polled by FactSet. A year earlier, JPMorgan reported quarterly earnings of $ 2.87 billion, or $ 0.78 per share. The bank reported revenues of $ 32.27 billion, up 14% from a year earlier.
After the coronavirus pandemic broke out in the US early last year, JPMorgan and other major banks set aside billions of dollars in loan losses to prepare for a potential flood of consumer and business defaults. The rainy days funds slammed into quarterly earnings for much of 2020. But big losses never materialized, and now banks are now cashing in on their zeal.
Wall Street was also the driving force behind JPMorgan’s first quarter results. Corporate and investment bank earnings nearly tripled to $ 5.74 billion, a quarterly record, and sales were up 46% to $ 14.6 billion. Trading revenues were up 25% from a year ago and investment banking fees were up 57%.
The recovery of the US economy has exceeded the internal expectations of the banks. Banks believe the trillions of dollars in government stimulus packages flowing through the economy, coupled with the accelerated distribution of vaccines, have shielded consumers and businesses from the worst financial scenarios of the pandemic.