JPMorgan tops estimates after posting $2.3 billion boost from better-than-expected loan losses

Jamie Dimon, Chairman and CEO of JPMorgan Chase & Co, at a luncheon hosted by The Economic Club of Chicago on November 22, 2017 in Chicago, Illinois.
Scott Olson | Getty Images News | Getty Images

JPMorgan Chase is scheduled to report second-quarter earnings before the opening bell Tuesday.

Here’s what Wall Street expects:

Earnings: $3.21 per share, 132% higher than a year earlier, according to Refinitiv.

Revenue: $29.9 billion, 11% lower than a year earlier.

Trading Revenue: Fixed income $4.16 billion, Equities $2.31 billion, according to FactSet.

Investment Banking Revenue: $3.1 billion.

JPMorgan Chase, the first major lender to report second-quarter earnings, will be closely watched for clues on how banks are navigating the U.S. economic reopening.

One key factor is that after the industry set aside tens of billions of dollars for loan losses last year, banks have been releasing reserves as borrowers have held up better than expected.

There was a wide range of expectations for second-quarter credit loss provisions at JPMorgan; analysts surveyed by FactSet expected a release of as much as $967 million to a provision of up to $2.6 billion. The bank had a $5.2 billion reserve release in the first quarter.

Trading revenue is expected to decline from the year earlier period, which saw frenzied activity in the aftermath of Federal Reserve actions to bolster markets during the early stage of the coronavirus pandemic.

Last month, JPMorgan CEO Jamie Dimon said that while trading revenue will decline from the previous year, investment banking revenue was headed for a 20% jump due to strength in mergers fees, he said.

Analysts may ask Dimon about the bank’s succession planning after it named two senior executives, Marianne Lake and Jennifer Piepszak, to run the company’s sprawling consumer bank. The changes led to the promotion of global research head Jeremy Barnum to CFO succeeding Piepszak; this is Barnum’s first quarter handling the firm’s earnings release.

Dimon may also be asked about his acquisition strategy after making the third purchase of a fintech start-up since December. Last month, the bank agreed to buy ESG investing platform OpenInvest, CNBC reported first.

Shares of JPMorgan have climbed 24% so far this year, exceeding the $17% rise of the S&P 500 Index.

This story is developing. Please check back for updates.

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