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Despite the robust quarterly performance, JPM shares fell more than 2% in premarket trading. The decline likely reflected investor concerns over management’s higher non-interest expense outlook for 2026.
Reported net revenues of $57.35 billion rose 27.7% year over year and topped the consensus mark of $49.14 billion. Strong Markets and investment banking (IB) activity powered core growth, while net interest income (NII) got support from decent loan demand.
The quarter included a $4.55 billion pretax gain related to Visa shares, which added $1.27 to earnings per share. JPM also recorded $1.03 billion of gains on certain equity investments, adding 29 cents per share. Including these significant items, net income jumped 41% year over year to $21.16 billion.
JPMorgan's Markets and Fee Income Momentum Boosts Growth
Markets revenues advanced 35% to $12.08 billion on elevated client activity, strong trading performance and continued financing demand in Equities. Fixed Income Markets revenues rose 6% to $6.05 billion, while Equity Markets revenue surged 86% to $6.03 billion.
IB revenues increased 45% to $3.90 billion. IB fees rose 30% to $3.28 billion on higher fees across products, led by equity underwriting. Payments revenues grew 12% to $5.30 billion, while Securities Services revenues gained 17% to $1.66 billion.
JPM's NII Benefits From Balance Sheet Expansion
Reported NII increased 9.9% to $25.51 billion. NII excluding Markets was $23.68 billion, up 4%, supported by higher deposit balances, greater revolving Card Services balances and wholesale loan growth. Lower rates partly offset those benefits.
Average loans expanded 10% to $1.52 trillion, while average deposits grew 7% to $2.69 trillion. The net yield on interest-earning assets was 2.40%, down from 2.43% a year earlier, showing rate pressure despite balance sheet growth.
JPM's Expenses Temper Gains, Credit Trends Offer Support
Non-interest expenses rose 15% year over year to $27.32 billion. Higher compensation, brokerage and distribution fees, marketing, technology and occupancy costs drove the increase. Still, the reported overhead ratio improved to 48% from 53% in the prior-year quarter.
The provision for credit losses was $2.52 billion, down 12%. Net charge-offs (NCOs) were $2.4 billion, down $44 million, and the company recorded a $149 million net reserve build, primarily in Wholesale. Consumer & Community Banking accounted for $2.16 billion of the provision.
JPM's Segment Performance Improves
Commercial & Investment Bank revenues climbed 27% from the prior-year quarter to $24.85 billion, while net income soared 46% to $9.68 billion.
Consumer & Community Banking revenues grew 8% to $20.27 billion, led by higher Card Services NII, auto operating lease income and wealth-management fees. Segment net income rose 3% to $5.31 billion. Debit and credit card sales volume rose 10% to $535.8 billion, while active mobile customers increased 6% to 63.7 million.
Asset & Wealth Management revenues climbed 19% to $6.85 billion. Assets under management reached $5.1 trillion, up 18%, aided by $50 billion of long-term net inflows.
Corporate net income was $4.21 billion compared with $1.7 billion a year ago, influenced by net gain related to Visa shares and gains on certain equity investments.
JPMorgan’s Capital Returns
JPMorgan’s capital position remained strong, even as ratios eased versus year-ago levels. The standardized common equity Tier 1 capital ratio was 14.1% as of June 30, 2026, compared with 15.1% a year earlier. Tangible book value per share rose 10% to $113.35.
Shareholder returns stayed elevated. The bank paid a common dividend of $4 billion, or $1.50 per share, and reported $6.2 billion of common stock net repurchases during the quarter.
Moreover, after clearing this year’s stress test, JPMorgan announced a new share repurchase program worth $50 billion and plans to hike its quarterly dividend by 10% to $1.65 per share.
JPMorgan’s Outlook for 2026
Management expects 2026 NII of roughly $105.5 billion and NII excluding Markets of about $96.5 billion. Both metrics show increases from the prior targets.
Adjusted expenses are projected at around $107.5 billion, with the increase from the prior outlook of $106 billion reflecting higher volume- and revenue-related costs. The Card Services NCO rate is now expected to be approximately 3.2%, down from the previous target of 3.4%.
Our View on JPMorgan
New branch openings, strategic global expansion efforts and decent loan demand are likely to keep aiding JPMorgan’s revenues. As rates remain steady, the company’s NII expansion pace is expected to gather pace, with an improving lending scenario offering further support. However, mounting expenses and a challenging operating backdrop are concerns.
JPMorgan Chase & Co. Price, Consensus and EPS Surprise
Jefferies Financial Group’s (JEF - Free Report) second-quarter fiscal 2026 (ended May 31) adjusted earnings per share from continuing operations of $1.03 missed the Zacks Consensus Estimate of $1.09. However, the bottom line increased significantly from the prior-year quarter.
Results were primarily hurt by a rise in expenses and weakness in the Asset Management business. However, record IB advisory and underwriting net revenues, as well as record equities net revenues, offered much-needed support.
Morgan Stanley (MS - Free Report) is slated to report second-quarter 2026 numbers tomorrow.
Over the past week, the Zacks Consensus Estimate for Morgan Stanley’s quarterly earnings has been revised 4% north to $2.89. This indicates 35.7% growth from the prior-year quarter.
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JPM Q2 Earnings Beat on Trading & IB, Higher Cost Outlook Drags Stock
Key Takeaways
JPMorgan’s (JPM - Free Report) second-quarter 2026 adjusted earnings of $6.14 per share beat the Zacks Consensus Estimate of $5.59 by 9.8%. The bottom line was up 17.2% from $5.24 reported a year ago.
Despite the robust quarterly performance, JPM shares fell more than 2% in premarket trading. The decline likely reflected investor concerns over management’s higher non-interest expense outlook for 2026.
Reported net revenues of $57.35 billion rose 27.7% year over year and topped the consensus mark of $49.14 billion. Strong Markets and investment banking (IB) activity powered core growth, while net interest income (NII) got support from decent loan demand.
The quarter included a $4.55 billion pretax gain related to Visa shares, which added $1.27 to earnings per share. JPM also recorded $1.03 billion of gains on certain equity investments, adding 29 cents per share. Including these significant items, net income jumped 41% year over year to $21.16 billion.
JPMorgan's Markets and Fee Income Momentum Boosts Growth
Markets revenues advanced 35% to $12.08 billion on elevated client activity, strong trading performance and continued financing demand in Equities. Fixed Income Markets revenues rose 6% to $6.05 billion, while Equity Markets revenue surged 86% to $6.03 billion.
IB revenues increased 45% to $3.90 billion. IB fees rose 30% to $3.28 billion on higher fees across products, led by equity underwriting. Payments revenues grew 12% to $5.30 billion, while Securities Services revenues gained 17% to $1.66 billion.
JPM's NII Benefits From Balance Sheet Expansion
Reported NII increased 9.9% to $25.51 billion. NII excluding Markets was $23.68 billion, up 4%, supported by higher deposit balances, greater revolving Card Services balances and wholesale loan growth. Lower rates partly offset those benefits.
Average loans expanded 10% to $1.52 trillion, while average deposits grew 7% to $2.69 trillion. The net yield on interest-earning assets was 2.40%, down from 2.43% a year earlier, showing rate pressure despite balance sheet growth.
JPM's Expenses Temper Gains, Credit Trends Offer Support
Non-interest expenses rose 15% year over year to $27.32 billion. Higher compensation, brokerage and distribution fees, marketing, technology and occupancy costs drove the increase. Still, the reported overhead ratio improved to 48% from 53% in the prior-year quarter.
The provision for credit losses was $2.52 billion, down 12%. Net charge-offs (NCOs) were $2.4 billion, down $44 million, and the company recorded a $149 million net reserve build, primarily in Wholesale. Consumer & Community Banking accounted for $2.16 billion of the provision.
JPM's Segment Performance Improves
Commercial & Investment Bank revenues climbed 27% from the prior-year quarter to $24.85 billion, while net income soared 46% to $9.68 billion.
Consumer & Community Banking revenues grew 8% to $20.27 billion, led by higher Card Services NII, auto operating lease income and wealth-management fees. Segment net income rose 3% to $5.31 billion. Debit and credit card sales volume rose 10% to $535.8 billion, while active mobile customers increased 6% to 63.7 million.
Asset & Wealth Management revenues climbed 19% to $6.85 billion. Assets under management reached $5.1 trillion, up 18%, aided by $50 billion of long-term net inflows.
Corporate net income was $4.21 billion compared with $1.7 billion a year ago, influenced by net gain related to Visa shares and gains on certain equity investments.
JPMorgan’s Capital Returns
JPMorgan’s capital position remained strong, even as ratios eased versus year-ago levels. The standardized common equity Tier 1 capital ratio was 14.1% as of June 30, 2026, compared with 15.1% a year earlier. Tangible book value per share rose 10% to $113.35.
Shareholder returns stayed elevated. The bank paid a common dividend of $4 billion, or $1.50 per share, and reported $6.2 billion of common stock net repurchases during the quarter.
Moreover, after clearing this year’s stress test, JPMorgan announced a new share repurchase program worth $50 billion and plans to hike its quarterly dividend by 10% to $1.65 per share.
JPMorgan’s Outlook for 2026
Management expects 2026 NII of roughly $105.5 billion and NII excluding Markets of about $96.5 billion. Both metrics show increases from the prior targets.
Adjusted expenses are projected at around $107.5 billion, with the increase from the prior outlook of $106 billion reflecting higher volume- and revenue-related costs. The Card Services NCO rate is now expected to be approximately 3.2%, down from the previous target of 3.4%.
Our View on JPMorgan
New branch openings, strategic global expansion efforts and decent loan demand are likely to keep aiding JPMorgan’s revenues. As rates remain steady, the company’s NII expansion pace is expected to gather pace, with an improving lending scenario offering further support. However, mounting expenses and a challenging operating backdrop are concerns.
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.
Performance & Earnings Dates of JPM’s Peers
Jefferies Financial Group’s (JEF - Free Report) second-quarter fiscal 2026 (ended May 31) adjusted earnings per share from continuing operations of $1.03 missed the Zacks Consensus Estimate of $1.09. However, the bottom line increased significantly from the prior-year quarter.
Results were primarily hurt by a rise in expenses and weakness in the Asset Management business. However, record IB advisory and underwriting net revenues, as well as record equities net revenues, offered much-needed support.
Morgan Stanley (MS - Free Report) is slated to report second-quarter 2026 numbers tomorrow.
Over the past week, the Zacks Consensus Estimate for Morgan Stanley’s quarterly earnings has been revised 4% north to $2.89. This indicates 35.7% growth from the prior-year quarter.