JPMorgan Chase reported second-quarter profit of $21.2 billion on Tuesday, the biggest quarterly profit ever posted by a U.S. bank, as trading, dealmaking and lending all powered the result. Earnings came to $7.70 per share, and net revenue reached $57 billion, up from $45 billion a year earlier.
The headline number was inflated by one-time gains, including a $4.6 billion net gain from the sale of Visa shares held by its corporate division and another $1 billion tied to certain equity investments. Even without those boosts, JPMorgan Chase said profit would have been $16.9 billion, still far above the year-ago quarter and enough to show the core business was running hot. On Tuesday, the stock rose 2.5%.
The scale of the quarter matters because it landed at the start of a bank earnings run that investors will use to judge whether Wall Street's strong markets can keep feeding profits. JPMorgan Chase's equity trading jumped 86% from a year ago to a record $6 billion, while equity underwriting revenue rose 78% to $829 million. The underwriting desk collected fees from SpaceX's IPO and Alphabet's follow-on stock sale, and net interest income rose 10% to $25.5 billion.
Jamie Dimon did not try to sell the quarter as a straight line into the future. He said the banking environment was close to as good as it gets and called it a very healthy, active, exuberant market with very high prices and very high volumes. But he also warned that geopolitical tensions, wars, sticky inflation and elevated asset prices could collide in a way that surprises markets, and he said the bank simply does not know how long the current stretch will last.
Jeremy Barnum offered a smaller but useful read on the consumer side. He said the consumer was maybe slightly better this quarter and that the labor market remains quite resilient, which helps explain why card sales volume at the consumer bank rose 10% and why JPMorgan Chase lowered the percentage of card loans it expects to write off this year to 3.2% from 3.4% in April. The bank also raised its full-year guidance for net interest income excluding its Markets business by $1.5 billion to $96.6 billion.
That leaves JPMorgan Chase in the strongest position it has been in for years, but not in a carefree one. The quarter showed how much profit the bank can make when capital markets are busy and consumers are still spending, yet Dimon's warning suggests the record may be a peak snapshot rather than a steady new normal.
