JPMorgan Chase raises key revenue target to $84 billion after First Republic takeover

Earlier this month, JPMorgan Chase raised its performance target following the government-brokered takeover of First Republic. The bank will generate about $84 billion in net interest income this year, New York-based JPMorgan said Monday in slides for an all-day investor presentation. That’s $3 billion more than April’s guidance. JPMorgan raised its net interest income outlook by $7 billion, causing its stock to jump on earnings day for the first time in 20 years. In addition, the bank said that “sources of uncertainty” regarding deposits and the economy could affect its outlook. Net interest income is the difference between what banks earn from loans and investments and what they pay depositors.
Among the banks that have benefited from the recent regional banking turmoil is JPMorgan Chase, the fourth-largest U.S. bank by assets. It was one of the only banks to see deposits rise in the first quarter as panicked customers sought safety at large institutions. It won an auction to acquire First Republic, a move expected to boost earnings and advance its efforts to attract wealthy clients. The bank also announced on Monday that it expects expenses to rise to $84.5 billion, unchanged from its previous guidance, excluding $3.5 billion in costs associated with the integration of First Republic. CFO Jeremy Barnum said that about half of those integration expenses would be recognized this year. The bank said trading and investment banking revenue in the second quarter would decline by 15% compared with the year-earlier period. Longtime JPMorgan CEO Jamie Dimon wrapped up the event with a question-and-answer session. He was asked how many years he expected to serve as CEO after rival chief James Gorman of Morgan Stanley announced plans to step down within a year last week. Dimon deflected the question, saying his plans hadn’t changed. “I can’t do this forever, I know that,” Dimon said. “But my intensity is the same. I think when I don’t have that kind of intensity, I should leave.”