JPMorgan Chase Markets Revenue Surges as Investment Banking Rebounds
Net interest income rose 10% year-over-year to $25.6 billion in the second quarter.
JPMorgan Chase (JPM), the largest U.S. bank by assets, saw net interest income rise 10% year-over-year to $25.6 billion in the second quarter. Excluding Markets, net interest income grew 4% year-over-year to $23.7 billion, supported by higher balances in deposits, revolving cards, and wholesale loans, which offset the impact of lower rates.
Growth in the balance sheet supported the interest income trajectory. Average loans increased 10% year-over-year and 2% sequentially to $1.5 trillion. Banking and Payments loans grew 13% year-over-year and 5% sequentially, while Asset and Wealth Management loans rose 18% year-over-year and 6% sequentially. Average deposits grew 7% year-over-year and 3% sequentially, with CIB client deposits increasing 11% year-over-year.
The Corporate and Investment Bank drove significant non-interest revenue gains. Markets revenue increased 35% year-over-year to $12.1 billion, fueled by an 86% surge in Equity Markets revenue and a 6% increase in Fixed Income Markets. Investment Banking fees rose 30% year-over-year and 14% sequentially to $3.3 billion, the highest level since 2021.
Segment returns remained high, though the Asset and Wealth Management franchise saw the most notable expansion. AWM's return on equity reached 48% in the second quarter, up from 44% in the first quarter and 36% a year ago. The Consumer and Community Banking segment reported an ROE of 34%, while the CIB segment reported 22%.
Credit costs trended lower as the bank reduced its provision for credit losses to $2.5 billion, a 12% decrease from $2.8 billion in the prior year. The bank recorded a net reserve build of $149 million, compared to a $439 million build in the same period last year.
Capital levels tightened as the bank continued its return of capital. The standardized CET1 capital ratio declined to 14.1% from 14.3% in the first quarter and 15.1% a year ago. Common stock net repurchases totaled $6.2 billion in the second quarter, down from $8.1 billion in the first quarter.
Operating expenses rose 15% year-over-year to $27.3 billion. The increase was driven by higher technology, marketing, and occupancy costs, as well as increased compensation related to revenue and front-office headcount.