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JPMorgan Smashes Profit Forecast With $5.2 Billion Reserve Release Boost

JPMorgan released another $5.2 billion in bad loan provisions in the first quarter, helping its top line earnings rise to $4.50 per share.

JPMorgan Chase  (JPM) - Get JP Morgan Chase & Co. Report posted much stronger-than-expected first-quarter earnings Wednesday as the biggest U.S. bank released around $5.2 billion in previous provisions for bad loans.

JPMorgan said earnings for the three months ending in March were pegged at $4.50 per share, up from 78 cents per share during the same period last year and well ahead of the Street consensus forecast of $3.09 per share. Removing the benefit of the reserve release, as well as other one-off items, JPMorgan's first quarter profit was $3.31 per share, the bank said.

Group revenues, JPMorgan said, rose 11.1% to $32.3 billion, again ahead of analysts' estimates of a $28.7 billion tally, while net interest income fell 11% to $13 billion.

"With all of the stimulus spending, potential infrastructure spending, continued Quantitative Easing, strong consumer and business balance sheets and euphoria around the potential end of the pandemic, we believe that the economy has the potential to have extremely robust, multi-year growth," said CEO Jamie Dimon. 

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"This growth can benefit all Americans, particularly those who suffered the most during this pandemic. If all of the government programs are spent wisely and efficiently, focusing on actual outcomes, the benefits will be more widely shared, economic growth will be more sustainable and future problems, like inflation and too much debt, will be reduced,” he added.

JPMorgan shares were marked 0.9% lower in early trading immediately following the earnings release to change hands at $152.55 each, a move that trims their six-month gain to around 50%.

Investment banking revenues rose by $2 billion to $2.9 billion, the bank said, while fixed income markets revenues surged 15% from last year to $5.8 billion. Equity markets revenues, however, were the standout gainer, surging 47% to a forecast-beating $3.3 billion.