JPMorgan reports record revenue for Q1: is banking crisis over?

JPMorgan Chase & Co (NYSE: JPM) opened in the green on Friday after reporting strong results for its first financial quarter thanks primarily to the higher interest rates.

Pro shares his view on the banking crisis

Its quarterly update relieves some of the anxiety surrounding the banking sector at large following recent failures that helped lift total deposits at JPMorgan this quarter by 2.0% sequentially. Still, David Harden of Summit Global Investments said today:

Banking crisis is not over. It’s more rolling. If you go back to the great financial crisis, some of the other blow ups came months later. We’ve learned from the past, there are some good things on the horizon. But we’re not through it.

Year-over-year, deposits were down 7.0% – slightly better than expected. The bank recorded roughly in line $2.3 billion of credit costs as it prepared for a slowing economy.

JPMorgan stock is now up nearly 3.0% for the year.

What drove profits for JPMorgan in Q1?

According to JPMorgan Chase & Co, its revenue from investment banking and trading remained roughly flat versus last year.

Consumer and community banking, though, noted a whopping 80% increase in profits on a year-over-year basis. On Yahoo Finance Live, Harden added:

The results are very good. I do expect some more volatility in the future. But having positive earnings by the big boys is a really good thing. I think it really helps the market gain some confidence.

Wall Street currently has a consensus “overweight” rating on JPMorgan stock.

Notable figures in JPMorgan Q1 earnings report

Earned $12.62 billion versus the year-ago $8.28 billion
Per-share earnings also climbed from $2.63 to $4.10
Revenue jumped 25% year-on-year to $38.35 billion
Consensus was $3.41 a share on $36.13 billion revenue
Net interest income climbed 49% YoY to $20.9 billion

For the full financial year, JPMorgan now forecasts about $81 billion in net interest income versus its previous guidance for $74 billion. The bank continues to see expenses at $81 billion as well this year, as per the earnings press release. According to Harden:

I’m not afraid of bank stocks but you got to be careful. If you’re going to hold banks, you have to look for high quality bank stocks like JPMorgan with quality earnings and strong transparency.