JPMorgan’s Q2 profit jumps 25% on one-time gains, Wall Street rally

JPMorgan Chase & Co.’s second-quarter profit rose on a one-time accounting charge and a Wall Street rebound, but another decline in a key revenue source highlighted the challenges facing even the largest U.S. bank.

Net income was $18 billion, up 25% from the year-ago period, thanks to a share swap in credit card giant Visa Inc. (V), which provided a gain of about $8 billion. Excluding those gains, JPMorgan earned $13.1 billion in the quarter.

Investment banking results beat analysts’ expectations, with fees from that business up 50% from a year ago and 17% from the previous quarter, to $2.35 billion. M&A revenue rose to $785 million, the highest since the third quarter of 2022.

These numbers bode well for other large institutions with huge investment banking operations, such as Goldman Sachs and Morgan Stanley.

But there were also fresh signs of how JPMorgan Chase is struggling to maintain its top performance during a prolonged period of high interest rates, high deposit costs and weak demand for loans.

A key measure of lending profit known as net interest income fell for the second straight quarter, down 1%.

However, JPMorgan is sticking to its full-year net interest income forecast of $91 billion, excluding trading revenue. That would be a 2% increase from last year’s net interest income.

JPMorgan Chase shares fell more than 1% in premarket trading.

“While market valuations and credit spreads appear to reflect a fairly benign economic outlook, we continue to be vigilant about potential risks,” said JPMorgan Chase CEO Jamie Dimon, referring to geopolitical tensions and persistent inflationary forces.

“Inflation and interest rates may remain higher than market expectations,” he added.

JPMorgan’s results marked the start of another earnings season for the U.S. banking industry as lenders set out to prove their resilience in the face of uncertainty over the U.S. economy, the path of monetary policy and the unknown outcome of this fall’s presidential election.

Click here for an in-depth analysis of the latest stock market news and events that move stock prices.

Read the latest financial and business news from Yahoo Finance.