JPMorgan reports lower-than-expected net interest income in Q1

JPMorgan Chase & Co. reported net interest income that slightly missed analyst estimates and raised its expense guidance for the year, sending shares down.

The firm earned $23.1 billion in NII in the first three months of 2024, up 11% from a year earlier, according to a statement Friday. It still expects to earn about $90 billion from the key revenue source this year, but lifted its guidance excluding the markets business to about $89 billion.

Adjusted expenses, meanwhile, could come in at about $91 billion for the year, higher than predicted earlier.

“Many economic indicators continue to be favorable. However, looking ahead, we remain alert to a number of significant uncertain forces,” chief executive Jamie Dimon said in the statement. He cited the wars, growing geopolitical tensions, persistent inflationary pressures and the effects of quantitative tightening.

“We do not know how these factors will play out, but we must prepare the firm for a wide range of potential environments to ensure that we can consistently be there for clients,” he said.

Friday’s results come as investors seek to assess the Federal Reserve’s interest-rate trajectory, particularly after an inflation reading Wednesday came in higher than expected. Dimon has been warning for months that inflation could be stickier than markets predict, and wrote in his annual shareholder letter on Monday that his firm is prepared for interest rates ranging from 2% to 8% “or even more.”

Shares of JPMorgan, up 14.9% this year through Thursday, fell about 4% in early trading in New York. Rivals Wells Fargo & Co. and Citigroup Inc. are also set to report first-quarter results Friday, with Goldman Sachs Group Inc., Bank of America Corp. and Morgan Stanley scheduled for next week. 

JPMorgan also reported a surprise $72 million net reserve release, while analysts had predicted a $556 million build. 

The biggest US bank took a $725 million charge for an additional Federal Deposit Insurance Corp. assessment tied to a pair of bank failures last year. 

Investment-banking revenue came in at $2 billion, above analyst expectations. Markets revenue fell 5%, less than expected with both equity and fixed-income trading beating estimates.