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When are JPMorgan ’s results expected?
JPMorgan Chase & Co is set to release its third quarter (Q3) 2023 results on 13 October 2023. The results are for the quarter ending September 2023.
What is ‘The Street’s’ expectation for the FY results?
‘The Street’ expectations for the upcoming results are as follows:
Revenue of $39,336 billion : +25.48% year-on-year (YoY)
Earnings per Share (EPS) : $3.87: +15.18% (YoY)
JPMorgan – a gauge for the US economy
JPMorgan Chase is ramping up its securitisation efforts in anticipation of proposed new US capital requirements for large banks. The bank plans to securitise and sell a higher portion of its loan portfolio, specifically focusing on products at Chase, its retail business, such as mortgages, auto lending, and credit card loans. This move would allow JPMorgan to remove these loans from its balance sheet, thereby avoiding the need to hold regulatory capital against them. However, the bank would still continue to service the loans to maintain its client relationships.
JPMorgan, as the largest US bank by assets, had $1.3tn in loans at the end of June. By securitising more of its loans, the bank aims to reduce its risk-weighted assets and comply with the potential new capital requirements.
It is worth noting that JPMorgan’s securitisation plans come at a time when the broader securitisation market is experiencing more subdued activity. US asset-backed and mortgage-backed securitisation issuance in 2023 has been the lowest since 2016.
JPMorgan CEO Jamie Dimon has criticised the Federal Reserve’s (Fed) proposals, expressing concerns that they could render bank stocks uninvestable. There are also concerns among Wall Street bankers that the new capital rules could disincentivise them from making loans and drive more banking activity into the less regulated shadow banking sector. This trend has been ongoing for over a decade with the expansion of hedge funds and private credit firms. Banks argue that this shift in lending activity could lead to higher borrowing costs, as banks benefit from cheaper deposit funding compared to these funds and firms. Regulators, on the other hand, argue that higher capital standards are necessary to enhance the safety of banks and prevent failures.
In other news, Ben Challice is stepping down as the global head of trading services at JPMorgan, while the head of the bank’s blockchain division, Tyrone Lobban, highlighted that the majority of his conversations with clients revolve around tokenised forms of traditional financial instruments rather than cryptocurrencies. Lobban noted that there is a significant focus on bringing traditional assets onto blockchain platforms, with many global banks, broker-dealers, and asset managers exploring permissioned or public blockchains for various purposes.
JPMorgan’s CEO recently stated that Artificial Intelligence (AI) is already an integral part of the firm. Q3 earnings may show what impact AI might have on the investment bank’s results as the US labour market remains tight and the economy relatively healthy, with trading volumes, investment banking fees, net interest margins and income from mortgage banking all expected to contribute.
How to trade JPMorgan into the results
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