JPMorgan Chase raised its net interest income forecast for 2025 after a strong performance in its investment banking and trading divisions helped it surpass profit expectations for the second quarter.
The bank now expects about US$95.5 billion of NII, or the difference between what it earns on loans and pays on deposits, compared with an earlier estimate of nearly US$94.5 billion.
“The U.S. economy remained resilient,” CEO Jamie Dimon said. “The finalization of tax reform and potential deregulation are positive for the economic outlook. However, significant risks persist - including from tariffs and trade uncertainty, worsening geopolitical conditions, high fiscal deficits and elevated asset prices.”
Market activity surged as investors seized opportunities and hedged risks in response to shifting U.S. tariff policies. The turmoil propelled JPMorgan’s trading revenue 15 per cent higher to US$8.9 billion, driven by gains in both fixed income and equities.
Investment banking fees also rose seven per cent to US$2.5 billion, underpinned by a rise in mergers and acquisitions and debt underwriting.
Both trading and investment banking performed better than management’s earlier guidance. While concerns remain, the pipeline for initial public offerings was picking up, CFO Jeremy Barnum said.
A well-capitalized balance sheet helped JPMorgan grow revenue in multiple segments, said Brian Mulberry, senior client portfolio manager at Zacks Investment Management, adding that the NII forecast lift was an “impressive flex.”
Consumer strength
Despite widespread concerns about tariff-related pressure on households, JPMorgan noted continued signs of consumer resilience.
“The consumer basically seems to be fine. You see a little bit more stress in the lower income bands. But that’s always true. Nothing there is out of line with our expectations,” Barnum said.
The bank set aside US$2.85 billion in provision for credit losses, compared with US$3.05 billion a year earlier.
Excluding one-off costs, the lender earned US$4.96 per share, compared with the US$4.48 per share that analysts were expecting, according to estimates compiled by LSEG.
Shares were flat in early trading.
Policy clouds outlook
Investors are closely scrutinizing banks’ results and their executives’ commentary this quarter to assess the impact of tariffs and the tax and spending bill signed into law by President Donald Trump this month.
The bill is estimated to add more than US$3 trillion to U.S. debt over the next decade, sparking backlash from some Republicans and Trump allies such as Elon Musk, who have raised concerns about fiscal irresponsibility.
However, while uncertainty has clouded the outlook, there were bright spots for lenders during the second quarter. JPMorgan was among 22 large banks that aced the U.S. Federal Reserve’s stress tests, enabling it to boost its quarterly dividend and announce US$50 billion in stock buybacks.
The U.S. Fed also advanced a proposal to overhaul the “enhanced supplementary leverage ratio,” which could lower the capital large global banks such as JPMorgan must hold against relatively low-risk assets.
Inorganic growth opportunities
JPMorgan’s strong capital base leaves room for mergers and acquisitions, and management once again flagged inorganic growth opportunities, but also warned the bar is high and it is not looking to buy into hot sectors such as private credit or large language models.
“I think acquisitions have a high bar, both financially, strategically, and in some cases, culturally. But we wouldn’t be doing our jobs if we weren’t thinking about it,” Barnum said.
Investors believe that while JPMorgan does not necessarily need M&A in any particular sector to boost growth, the bank could still be on the lookout in areas such as technology.
“If there are areas in the technology side that would further their lead in terms of the efficiency of the business or capabilities that they could offer, from a trading perspective to their corporate clientele, it would be expected that they would pursue those, depending on various factors,” said Matt Stucky, chief portfolio manager of equities at Northwestern Mutual Wealth Management, which owns JPMorgan stock.
Headcount fell by more than 1,300 employees to 317,160, but the bank’s workforce remains the largest among its peers after a rapid expansion in recent quarters. JPMorgan has said it expects it to be flat in 2025.
The bank’s overall profit dropped 17 per cent in the second quarter, but the comparison was skewed because of a nearly US$8-billion one-off gain it had recorded on a share exchange agreement with Visa last year.
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Reporting by Niket Nishant in Bengaluru and Nupur Anand in New York, editing by Lananh Nguyen, Anil D’Silva, Nick Zieminski and Rod Nickel
