The bank was also able to continue cutting expenses.
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The bank’s average book of core loans during the quarter – those related to ongoing businesses it plans to maintain – grew 16 percent, with particular expansion in mortgages and commercial real estate. The unit’s total revenue rose 4% to $11.5 billion. Wall Street analysts expected JPMorgan Chase to announce a share repurchase plan of around $8 billion. According to the latest Fortune list of most profitable companies, JPMorgan Chase is the second most profitable USA company behind Apple.
At the same time, JPMorgan managed to keep down costs, apart from technology, with overall operating expenses dropping 6 percent compared with the year-earlier period.
The “Brexit” is “not a financial crisis”, Marianne Lake, JPMorgan’s CFO, said during a morning call with reporters. Trading maintained momentum through the second half of June, instead of tapering off as it has done so historically, possibly as a result of the U.K.’s vote to leave the European Union. The bank also benefited from oil prices stabilizing and bond prices rising sharply this quarter. The same can be said of JPMorgan.
While executive at JPMorgan said that trading had rebounded during both April as well as May that was previous, to the referendum vote that roiled the markets and pushed aside expectations for more US rate hikes to at least 2017.
The company reported net income of $6.2bn (£4.6bn) for its second quarter of the financial year, down one per cent compared with $6.3bn the year before but up 12 per cent on $5.5bn in the last quarter.
The robust earnings were driven by a surge in trading revenue and loan growth. Customers used their credit cards more and kept higher balances on their cards, a signal that Americans are feeling confident enough to take on increasing amounts of debt again.
Chase is the largest bank in the United States, and in 2015 it made .9 billion in after-tax income. While the bank’s charge-offs rose in the quarter, Lake said that was largely due to the bank “opening the credit box”, a term used by bankers to say they are making loans to people who wouldn’t have qualified before.
A day after Starbucks announced pay raises for employees, JPMorgan Chase followed suit by pledging to raise its baseline minimum pay by $6.35 an hour over the next three years to $16.50.
“Many had suspected that continued low interest rates, and the uncertainty around Brexit would translate into lackluster sales for JPMorgan and other banks in the quarter”, Fortune said.
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Wells Fargo & Co and Citigroup Inc the third- and fourth-biggest USA banks, report results on Friday.
