Has the Financial Crisis Finally Caught Up With JPMorgan?
Shares of JPMorgan Chase (NYSE:JPM) closed the day down 3.66 percent at $55.30 on Friday after the bank, America’s largest by assets, reported first-quarter results that came in below analyst expectations. JPMorgan reported net income of $5.3 billion, or $1.28 per share, a 19.5 percent decline on the year and 12 cents below the mean analyst estimate. Total net revenues fell 8.5 percent on the year to $22.99 billion, below the mean analyst estimate of $24.53 billion.
JPMorgan Chair and Chief Executive Officer Jamie Dimon defended the results. “JPMorgan Chase had a good start to the year, given there were industry-wide headwinds in Markets and Mortgage,” Dimon said in the earnings release. “Consumer & Community Banking deposit growth and card sales volume both remain above the industry average, and we have made significant progress in Business Banking originations — up 22 percent. The Corporate & Investment Bank was No. 1 in Global IB fees, with No. 1 positions in global debt and equity, global syndicated loans and global long-term debt. Gross investment banking revenue with Commercial Banking clients was up 31 percent. Asset Management had its twentieth consecutive quarter of positive net long-term client flows and had record loan balances, up 20 percent.”
All this is true, but it wasn’t enough to stop the bad news bears brigade from marching on Friday following the release. In an interview with Bloomberg, Josh Rosner, managing director at Graham Fisher, argued that “there’s not a lot of growth opportunity” for banks like JPMorgan and Wells Fargo (NYC:WFC), which also reported earnings today. Wells Fargo beat earnings estimates and met revenue estimates, but Rosner said that “both of them had kind of weak top line.”