JPMorgan continues to dominate across multiple fronts 💪🏼; Visa is rapidly expanding beyond just cards 💳
JPMorgan continues to dominate across multiple fronts 💪🏼; Visa is rapidly expanding beyond just cards 💳
FinTech is Eating the World, 21 July
Hey Everyone,
TGIF! We’re finishing a solid week strongly as today we’re going to look at JPMorgan which continues to dominate across multiple fronts (why it’s the Microsoft of Banking, JPM’s badass FinTech strategy & more deep dives), and Visa, which is rapidly expanding beyond just cards (why it’s a brilliant strategy + a deep dive into the card giant). Let’s jump straight into the interesting stuff 🌶
JPMorgan continues to dominate across multiple fronts 💪🏼
Earnings call 📞 Banking giant JPMorgan JPM 0.00%↑ recently reported its second-quarter earnings that topped analysts’ expectations, as the company benefited from higher interest rates and better-than-expected bond trading.
Let’s take a look at the key numbers and why they matter.
More on this 👉 Here are the most important takeaways from JPMorgan Chase's Q2 2023 earnings report:
First and foremost, JPMorgan’s retail banking division was its main source of strength this quarter. Profit surged 71% in the business to $5.3 billion on a 37% jump in revenue. Massive 😳
Net income was $14.5 billion, up 67% year-over-year. Excluding significant items (=First Republic purchase), net income was $13.3 billion.
Total revenue was $41.3 billion, up 34% year-over-year. Managed revenue was $42.4 billion, up 34%.
Average loans were up 13% and average deposits were down 6%.
The consumer business saw continued loan growth, with card loans up 18%.
Investment banking fees remained challenged.
Provision for credit losses was $2.9 billion, reflecting a $1.5 billion net reserve build and $1.4 billion of net charge-offs.
All in all, it was a strong quarter for JPMorgan with robust loan growth, higher net interest income from rising rates, solid capital levels, and profitability. However, investment banking fees were weak, credit costs increased, and the economic outlook has risks related to inflation, interest rates, and geopolitics.
✈️ THE TAKEAWAY
What’s next? 🤔 JPMorgan has been dominating recently on multiple fronts. Whether it’s about deposits, funding costs, or net interest income — all hot-button topics since the regional banking crisis began in March — the bank has been outperforming smaller peers. Consistently. More importantly, recently reported outstanding results yet again showed strength across the board and proved that JPMorgan is the Microsoft of Banking. Looking ahead, JPM still seems to be slightly undervalued (by 4-8% based on my DCF analysis), and given its good P/E and massive ambitions (and potential!) in the FinTech space alone, the stock appears like a good and safe long-term investment. Pay close attention!
Bonus: JPMorgan is the Microsoft of Banking 😎
JPMorgan has built its own ChatGPT for Finance 😳
Disclaimer: this isn’t investment advice.