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Big banks are making big profits as customers shed the pandemic and traders take hold of busy markets.
JPMorgan Chase, the nation’s largest bank by assets, reported second-quarter net income of $ 11.9 billion on Tuesday, up from $ 4.7 billion a year earlier. Its earnings per share of $ 3.78 and revenue of $ 30.5 billion exceeded analysts’ expectations.
Consumers are starting to spend more on travel and entertainment, and they’re also buying homes and cars faster, the bank said. Its investment banking fees were the highest they had ever been, supported by a warm market for mergers and acquisitions.
“Balance sheets for consumers and wholesalers remain exceptionally strong as the economic outlook continues to improve,” Jamie Dimon, managing director of JPMorgan, said in a statement.
The company’s confidence in the rebound was reflected in the $ 3 billion release of its rainy days fund that was set aside for an expected attack of consumer defaults that never failed. emerged, thanks to strong government stimulus efforts that helped keep many Americans afloat. Net write-offs, or the debt the bank has given up on trying to collect, fell 53%, “reflecting the increasingly healthy condition of our customers and clients,” Dimon said.
Goldman Sachs also reported larger profit for the quarter compared to the same period a year ago, earning nearly $ 5.5 billion on revenue of nearly $ 15.4 billion. On a per share basis, Goldman’s performance of $ 15.02 was well above Wall Street’s forecast of $ 9.88. Analysts expected Goldman’s profit to be just $ 3.4 billion.
But compared to the first three months of 2021, its profits were lower, indicating that the bank and Wall Street competitors may be reaching the end of the frenzied trading period sparked by the pandemic.
Goldman’s trading revenue for the quarter was lower than at the start of the year and the same period last year. Its transactions in fixed income, commodities and other financial products generated $ 4.9 billion in revenue for the quarter, up from nearly $ 7.6 billion earlier this year and $ 7.2 billion in the quarter. during the same period a year ago. Analysts expected a better performance, predicting the bank would withdraw just over $ 5 billion from these transactions.
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