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JPMorgan Chase Eases; CEO Reportedly Warns of Trading-Revenue Drop

JPMorgan Chase CEO Jamie Dimon says second-quarter trading revenue will drop to just north of $6 billion.

JPMorgan Chase  (JPM) - Get Report Chief Executive Jamie Dimon reportedly warned on Monday that trading revenue at the financial services giant would decline 38% from a year earlier.

Shares of the New York company at last check were off 2.1% to $156.95. 

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Trading revenue at the largest U.S. bank will drop to just north of $6 billion in the second quarter, Dimon said at a Morgan Stanley virtual conference, Bloomberg reported.

That tally could end up lower than the average analyst estimate of $6.5 billion, according to data compiled by Bloomberg.  

Market volatility prompted by the pandemic had proved lucrative for the biggest Wall Street operations.

This quarter will be “more normal” for fixed-income and equities trading, meaning “something a little bit north of $6 billion, which is still pretty good, by the way,” Dimon said. 

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Investment-banking revenue will be driven up by an active mergers-and-acquisitions market, resulting in what could be one of the company's best quarters for that business, the executive said.

Dimon also pared back JPMorgan’s forecast for net interest income, the difference between what the bank takes in on loans and pays out on deposits. Dimon predicted $52.5 billion for this year, down from a previous estimate of $55 billion for 2021.

The banking giant has been “effectively stockpiling” cash rather than using it to buy Treasury securities or other investments because of the possibility higher inflation will force the Federal Reserve to boost interest rates, Dimon said, according to CNBC.

“We have a lot of cash and capability and we’re going to be very patient because I think you have a very good chance inflation will be more than transitory,” Dimon said.

Last month, the company appointed top executives Marianne Lake and Jennifer Piepszak as co-heads of its consumer and community banking unit.

In April, CoinDesk reported that JPMorgan Chase will offer an actively managed bitcoin fund to its clients later this year. 

The company said in the same month that it was set to bring all its U.S. staff back to work in its offices on a “consistent rotational schedule” starting in early July, a media report said..