JPMorgan raises NII forecast to $91b

JPMorgan Chase revised its forecast for net interest income (NII) on Monday, which represents the earnings from loans minus the payouts on deposits, to $91 billion, excluding the markets division, Reuters reported.

Pre-market trading saw a 1 per cent uptick in the bank’s shares, ahead of its investor day event scheduled in New York later in the morning.

Analysts were previously let down by JPMorgan’s NII forecasts, expecting greater returns amidst consistently higher interest rates. In April, the bank increased its NII projection to $89 billion, up from $88 billion, excluding the markets division. Simultaneously, the overall NII forecast, including trading, remained steady at $90 billion.

According to Reuters, the acquisition of billions in loans following the purchase of the collapsed First Republic Bank last May boosted JPMorgan’s interest income, contributing to record profits. However, Chief Financial Officer Jeremy Barnum cautioned that these gains might not be sustainable.

Following a year of record profits, investors are keen on understanding JPMorgan’s succession plans, investments in artificial intelligence (AI), and diversification beyond traditional banking.

Notably,  CEO Jamie Dimon’s potential departure within 3.5 years has spurred speculation regarding his successor.

The board has identified Jennifer Piepszak and Troy Rohrbaugh, co-CEOs of the commercial and investment bank, as potential candidates for the top position. Marianne Lake, CEO of consumer and community banking, and Mary Erdoes, CEO of asset and wealth management, are also contenders.

JPMorgan’s stock has surged 20.4 per cent in 2024, outpacing both the S&P index of bank shares and the broader equity markets, reaching a record high by the end of the week.