JPMorgan Chase beats profit estimates on strong trading, $5.2 billion release of loan-loss reserves

Earnings

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JPMorgan Chase CEO Jamie Dimon speaks at the North America’s Building Trades Unions (NABTU) 2019 legislative conference in Washington, April 9, 2019.
Jeenah Moon | Reuters

JPMorgan Chase is scheduled to report first-quarter earnings before the opening bell on Wednesday.

Here’s what Wall Street expects:

Earnings: $3.10 per share, almost 300% higher than a year earlier, according to Refinitiv.
Revenue: $30.52 billion, 5% higher than a year earlier.
Net interest margin: 1.79%, according to FactSet
Trading revenue: Fixed income $4.97 billion, equities $2.31 billion

JPMorgan Chase, the first major bank to report first-quarter earnings, will be closely watched for clues as to how the industry will emerge from the coronavirus pandemic.

One key question is whether banks will continue to release loan loss reserves — and the magnitude of those releases — that are no longer needed as the U.S. economic recovery gains pace. In the fourth quarter, JPMorgan beat expectations in part by releasing $2.9 billion in reserves.  

JPMorgan, with the world’s biggest Wall Street division by revenue, is also expected to benefit from robust investment banking fees driven by record issuance of SPACs, the blank check companies that saw more activity in the first quarter than all of 2020, itself a record year. Trading revenue is also expected to be a tailwind in the quarter.

Analysts will also be curious about the pace of share repurchases the bank is expected to make. Last month, the Federal Reserve said banks that pass the industry’s 2021 stress test will be allowed to resume higher levels of dividend payouts and buybacks starting June 30.

Shares of JPMorgan rose 21% so far this year, compared to the 25% advance of the KBW Bank Index.

This story is developing. Please check back for updates.

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