JPMorgan Chase Q2 earnings miss as investment banking fees sink (NYSE:JPM)

JPMorgan Chase (NYSE:JPM) Q2 EPS missed the consensus estimate Thursday as global investment banking fees slid in “challenging macro environment”, more than offsetting strong consumer spending in its consumer banking business and Y/Y gains in its commercial banking unit.

JPM stock is dropping 2.6% in Thursday premarket trading.

The company has temporarily suspended its stock buybacks as it builds capital to meet higher requirements set as a result of its recent stress test.

For the full year 2022 JPMorgan (JPM) boosts its guidance for net interest income ex-Corporate & Investment Bank Markets to $58B+ vs. previous estimate of $56B+ (and $53B+ after Q1 results). The company maintains its outlook for 2022 adjusted noninterest expense at ~$77B in April. FY2022 card net charge-off rate is expected to be under 2%.

Q2 EPS of $2.76 vs. $2.91 consensus; vs. $2.63 in Q1 2022 and $3.78 in the year-ago quarter.

Provision for credit losses of $1.10B vs. $1.46B in Q1 and benefit of $2.29B in Q2 2021.

Q2 total noninterest expense of $18.7B vs. $19.2B in Q1 and $17.7B in Q2 2021.

Return on tangible common equity was 17% vs. 16% in the previous quarter and 23% in the year-ago quarter.

Q2 revenue and net income by segment:

• Consumer & Community Banking revenue of $12.6B vs. $12.2B in Q1 and $12.8B in the year-ago quarter; net income of $3.10B increased 7% from Q1 and down 45% from a year ago;
• Corporate & Investment Banking revenue of $11.9B fell 12% Q/Q and 10% Y/Y; Banking revenue of $3.22B dropped 37% Y/Y and Markets & Securities revenue of $8.72B increased 8% Y/Y; CIB net income of $3.73B fell 15% Q/Q and 26% Y/Y;
• Commercial Banking revenue of $2.68B rose 12% Q/Q and 8% Y/Y; net income of $994M rose 17% Q/Q and fell 30% Y/Y.
• Asset & Wealth Management revenue of $4.31B was little changed from Q1 and increased 5% Y/Y; net income of $1.00B, roughly flat Q/Q and dropped 13% Y/Y.

JPMorgan’s (JPM) total loans were $1.10T at the end of Q2 2022 vs. $1.07T at the end of Q1; total deposits of $2.47T vs. $2.56T at Q1-end.

Conference call at 8:30 AM ET

Earlier, JPMorgan Chase GAAP EPS of $2.76 misses by $0.13, revenue of $30.7B misses by $1.12