JP Morgan increases 2024 interest income expectation to $91 billion

JPMorgan increases 2024 interest income expectation to $91 billion

New York – JP Morgan Chase on Monday increased its prediction for net interest income (NII), or the difference between what it makes on loans and pays out on deposits, to $91 billion, excluding the markets business.

The bank’s shares increased by 1% in premarket trade ahead of its investor day event, which is set to begin later this morning in New York.

JP Morgan’s previous expectations for NII disappointed analysts, who expected the bank to benefit more from continuously high interest rates.

The lender raised its NII forecast in April to $89 billion, from an earlier $88 billion, excluding the markets division. At the time, including trading, the company had kept its NII forecast unchanged at $90 billion.

JP Morgan acquired billions in loans after it bought the collapsed First Republic Bank last May. The purchase fueled interest income and helped propel profits to a record.

For months, Chief Financial Officer Jeremy Barnum has been tempering NII forecasts, claiming that the growth was unsustainable.

In an investor presentation, the bank also stated that it expected overall expenses of approximately $92 billion in 2024, which is more than its earlier expectations due to a $1 billion foundation contribution.

With JP Morgan coming off a year of record earnings, investors are curious about the company’s succession plans, investments in artificial intelligence, and potential beyond traditional banking.

Dimon, 68, has led JP Morgan for more than 18 years, outlasting many other financial CEOs. Furthermore, several executives who worked under Dimon have gone on to lead other major financial organizations, making his succession plans a long-standing source of conjecture.

Dimon stated last year that he could step down in 3.5 years.

JP Morgan’s board of directors has named Jennifer Piepszak and Troy Rohrbaugh, co-CEOs of its commercial and investment banks, as contenders for the top job. Marianne Lake, CEO of Consumer and Community Banking, and Mary Erdoes, CEO of Asset and Wealth Management, are also in the race.

The stock has risen 20.4% in 2024, outpacing an S&P index of bank shares as well as the broader equity markets. It closed at a record high on Friday.

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