Financial services giant JPMorgan Chase & Co. (JPM) reported Thursday a 76% rise in net profit for the second quarter, reflecting sharply lower provision for credit losses. Meanwhile, the company posted a decline in revenues, stating that consumer-lending businesses did not meet its expectations nor generate satisfactory returns on capital.
JPMorgan, a Dow component, reported that second-quarter net income grew to $4.80 billion from $2.72 billion in the second quarter of last year. On a per share basis, earnings surged 289% to $1.09 from last year's $0.28.
The latest quarter results benefited from a $1.5 billion or $0.36 per share reduction of loan loss reserves, partially offset by a charge of $550 million or $0.14 per share for the U.K. bonus tax.
On average, 24 analysts polled by Thomson Reuters expected the company to report earnings of $0.70 per share for the quarter. Analysts' estimates typically exclude special items.
On a sequential basis, net income rose 44% from $3.33 billion, and earnings per share grew 47% from $0.74 recorded in the first quarter.
The company said its provision for credit losses for the second quarter was $3.36 billion, down 65% from prior-year's $9.70 billion, reflecting reduction in the allowance for credit losses as a result of improved delinquency trends and reduced net charge-offs.
Second-quarter net revenues, on a reported basis, dropped 2% to $25.10 billion from prior year's $25.62 billion, and on a managed basis, fell 8% to $25.61 billion from $27.71 billion in the year ago quarter. Eleven Wall Street analysts had consensus revenue estimate of $25.59 billion for the quarter.
Sequentially, reported and managed revenues declined 9% each from $27.67 billion and $28.17 billion, respectively, in the first quarter.
In the second quarter, noninterest revenue declined modestly to $12.8 billion, reflecting lower principal transactions revenue on declined trading results, and lower investment banking fees, partially offset by higher securities gains. Net interest income was $12.8 billion, down 13% from the prior year, largely driven by lower loan balances.
Commenting on the results, Jamie Dimon, Chairman and Chief Executive Officer, said, "Although we are gratified to see consumer-lending net charge-offs and delinquencies decline, they remain at extremely high levels and therefore returns in our consumer-lending businesses are still unacceptable. As a result, these businesses did not meet expectations nor generate satisfactory returns on capital for our shareholders. It is too early to say how much improvement we will see from here."
Dimon added, "We saw solid performance in our other businesses. In particular, our wholesale businesses experienced reduced net charge-offs that led to reductions in loan loss reserves, and are currently seeing credit costs which reflect the increasingly healthy condition of our wholesale clients."
The New York-based company, founded in 1823, is the No. 2 bank in the U.S. It provides a range of financial services and operates in mainly six segments - Investment Bank, Commercial Banking, Treasury & Securities Services, Asset Management, Retail Financial Services and Card Services.
Investment Bank segment recorded second-quarter net income of $1.38 billion, down 6% from last year, mainly due to 13% drop in revenues to $6.33 billion and higher noninterest expense. These were offset by a benefit of $325 million from the provision for credit losses, compared with an expense of $871 million in the prior year. In the segment, investment banking fees decreased 37% to $1.4 billion, hurt by 68% drop in equity underwriting fees, 6% decline in debt underwriting fees, and 10% drop in advisory fees.
In the quarter, Retail Financial Services segment's net income was $1.04 billion, compared with $15 million in the prior year, mainly on 55% drop in provision for credit losses to $1.72 billion. Meanwhile, net revenues dropped 2% year-over-year to $7.81 billion, reflecting a 4% decline in net interest income to $4.8 billion on the impact of lower loan and deposit balances. Noninterest revenue was $3.0 billion, relatively flat with the prior year.
Within this segment, Retail Banking net revenue fell 3% due to declining deposit-related fees and lower deposit balances, largely offset by a shift to wider-spread deposit products and higher debit card income. Mortgage Banking & Other Consumer Lending net revenue, however, grew 10% from the prior year. Real Estate Portfolios net revenue declined 14% in the quarter, due to a decline in net interest income on lower loan balances, reflecting portfolio run-off.
Card Services segment generated second-quarter net income of $343 million, compared with prior year's net loss of $672 million. Provision for credit losses fell 52% to $2.22 billion. Net revenue dropped 13% to $4.22 billion on 22% decline in net interest income, partly offset by a 55% rise in non interest revenue.
In the Card Services segment, end-of-period loans were $143.0 billion, down 17% from the prior year and 4% from the prior quarter. Average loans declined 16% to $146.3 billion. The company noted that the declines in both end-of-period and average loans were consistent with expected portfolio run-off.
Commercial Banking net income climbed 88% to $693 million, with provision for credit benefit of $235 million and 2% rise in revenues to $1.49 billion. Net interest income dropped 6%, while noninterest revenue grew 19% from last year.
Treasury & Securities Services' net income for the quarter fell 23% to $292 million, hurt by a 1% decline in net revenues to $1.88 billion as well as higher noninterest expense.
The company's second-quarter net income from Asset Management segment grew 11% to $391 million, reflecting 4% rise in net revenues to $2.07 billion, and lower provision for credit losses, partially offset by higher noninterest expense. Revenue from the Private Bank rose 9%, and from Retail went up 17%. Institutional revenue dropped 11%, while revenue from Private Wealth Management grew 4%.
Corporate/Private Equity segment recorded a 19% rise in net income to $653 million, despite an 18% drop in revenues to $1.85 billion.
On the strength of the balance sheet, Dimon said, "We maintained very high liquidity, with a deposit-to-loan ratio of 127%, and generated additional capital, ending the quarter with a strong Tier 1 Common ratio of 9.6%."
In a research note on U.S. banks issued last week, Credit Suisse said second-quarter earnings results for the banks would be pressured by lackluster top line growth, offset in part by declining provision expense. The brokerage rates JPMorgan stock at "Outperform."
"It has largely been telegraphed that capital markets results will be weak in 2Q due to both weak trading and investment banking results. The largest variable will be the level of provisioning given the expected slowdown in problem asset growth,'' Credit Suisse said.
Among others in the industry, Bank of America Corp. (BAC) is slated to report second-quarter results on July 16. Wall Street expects the company to earn $0.22 per share on revenues of $29.75 billion.
Citigroup Inc. (C), another peer, is also expected to report on Friday second-quarter earnings of $0.05 per share on revenues of $22.16 billion.
For the first six months of the year, JPMorgan reported a 67% rise in net income to $8.12 billion from last year's $4.86 billion. Earnings per share surged 169% to $1.83 from $0.68 a year ago. Reported net revenue rose 4% to $52.77 billion from $50.65 billion last year, while managed net revenue dropped 2% to $53.79 billion from $54.63 billion in the previous year.
Looking ahead, Dimon said, "As always, and regardless of uncertainties about the credit environment and pending regulation, we remain committed to the long-term growth of our franchise."
JPM closed Wednesday's regular trade at $40.35, down $0.13 or 0.32%, on 37.32 million shares and added $0.10 in the extended trade. In pre-market activity, the shares rose $0.26 or 0.64% to $40.61. For the past year, the stock traded in the range of $35.01-$48.20.
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April 24, 2026 15:15 ET Economics news flow was relatively light this week even as the conflict in the Middle East continued, raising concerns for policymakers. In the U.S., spending data, initial jobless claims and pending home sales were the highlights. Business confidence in the biggest euro area economy was in focus in Europe. Inflation data from Japan gained attention in Asia.