JPM's Q2 Earnings Beat on Solid Capital Markets & Loans, NII View Up

Solid trading and investment banking (IB) performance and impressive growth in credit card and wholesale loans drove JPMorgan’s JPM second-quarter 2025 adjusted earnings of $4.96 per share. The bottom line handily surpassed the Zacks Consensus Estimate of $4.51.

This excluded the income tax benefit of $774 million. Including this one-time gain, earnings were $5.24 per share.

Behind JPMorgan’s Headline Numbers

Markets revenues were impressive and exceeded management's expectations of growth in the mid-to-high single-digit range. The metric soared 15% to $8.9 billion. Specifically, fixed-income markets revenues jumped 14% to $5.7 billion, while equity trading numbers rose 15% to $3.2 billion. Our estimates for fixed-income and equity markets revenues were $5.21 billion and $3.26 billion, respectively.

Further, the IB business performance was far more robust than expected by management. Advisory fees and debt underwriting fees rose 8% and 12%, respectively. On the contrary, equity underwriting fees fell 6%. Overall, total IB fees (in the Commercial & Investment Bank segment) were up 7% from the prior-year quarter to $2.51 billion. The company had projected IB fees to decline in the mid-teens range during the quarter.

Also, the company recorded an increase in net interest income (NII), driven by higher yields and 7% year-over-year jump in total loans. As such, management now expects NII to be almost $95.5 billion this year, up from the prior target of $94.5 billion.

Among other positives, Consumer & Community Banking (CCB) average loan balances were up 1% year over year. Also, debit and credit card sales volume increased 7%.

Mortgage fees and related income grew 4% to $363 million. We had projected the metric to be $288.1 million. Also, the company reported a decline in provision for credit losses in the quarter. 

During the quarter, adjusted operating expenses rose. Management expects adjusted non-interest expense to be $95.5 billion for this year, up from $91.1 billion in 2024.

JPM’s Revenues Dip, Expenses Stable

Net revenues, as reported, were $44.91 billion, down 11% year over year. The top line outpaced the Zacks Consensus Estimate of $43.81 billion. Last year's quarter included one-time Visa shares-related gains.

NII rose 2% year over year to $23.21 billion. Our estimate for NII was $22.98 billion.

Non-interest income plunged 21% to $21.7 billion. The second quarter of 2024 included a $7.9 billion net gain related to Visa shares. Excluding this, adjusted non-interest income grew almost 10%. Our estimate for non-interest income was $19.74 billion.

Non-interest expenses (on a managed basis) were $23.78 billion, relatively stable year over year. Excluding the $1.0 billion contribution of Visa shares to the JPMorgan Chase Foundation in the prior year, non-interest expense grew 5%. This was mainly due to higher compensation expenses, brokerage expenses and distribution fees and technology expenses. We had projected non-interest expenses to be $23.65 billion.

The performance of JPMorgan’s business segments, in terms of net income generation, was decent. The CIB, Asset & Wealth Management and CCB segments witnessed a rise in net income on a year-over-year basis. On the other hand, the Corporate segment recorded a fall in net income. Overall, net income declined 17% to $15 billion. Excluding non-recurring items, net income was $14.2 billion. We had projected net income to be $12.86 billion.

JPMorgan’s Credit Quality: A Mixed Bag

Provision for credit losses was $2.85 billion, down 7% from the prior-year quarter. Our estimate for the metric was $3.08 billion.

Net charge-offs (NCOs) grew 8% to $2.41 billion. Also, as of June 30, 2025, non-performing assets (NPAs) were $10.48 billion, surging 24%.

JPM’s Capital Position Solid

Tier 1 capital ratio (estimated) was 16.1% at the second-quarter end, down from 16.7% in the prior-year quarter. Tier 1 common equity capital ratio (estimated) was 15%, down from 15.3%. Total capital ratio was 17.8% (estimated) compared with 18.5% a year ago.

Book value per share was $122.51 as of June 30, 2025, compared with $111.29 a year ago. Tangible book value per common share was $103.4 at the end of June 2025, up from $92.77.

Update on JPMorgan’s Share Repurchases

During the reported quarter, JPMorgan repurchased 29.8 million shares for $7.1 billion.

Further, the company cleared the 2025 stress test and authorized a new share repurchase plan of $50 billion, which became effective from July 1. This program replaced the 2024 share buyback authorization of $30 billion.

Our Take on JPMorgan

New branch openings, strategic acquisitions, a global expansion plan, relatively high interest rates and decent loan demand are likely to keep driving JPMorgan’s revenues. However, poor asset quality and mounting expenses are concerns. Further, the current macroeconomic environment is expected to create headwinds for the company in the near term.
 

JPMorgan Chase & Co. Price, Consensus and EPS Surprise

JPMorgan Chase & Co. price-consensus-eps-surprise-chart | JPMorgan Chase & Co. Quote

JPMorgan currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Dates & Expectations of JPM’s Peers

Bank of America BAC is slated to report second-quarter 2025 numbers on July 16.

Over the past week, the Zacks Consensus Estimate for Bank of America’s quarterly earnings has been revised 1.1% lower to 86 cents. This indicates a 4.8% rise from the prior-year quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

The PNC Financial Services Group PNC is also scheduled to announce second-quarter 2025 results on July 16.

Over the past seven days, the Zacks Consensus Estimate for PNC Financial’s quarterly earnings has remained unchanged at $3.56. This implies a 7.8% growth from the prior-year quarter.

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This article originally published on Zacks Investment Research (zacks.com).

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