JPMorgan Chase posts record quarterly profit for a US bank as earnings rise 41%

JPMorgan Chase on Tuesday, July 14, reported the highest quarterly profit ever recorded by a US bank, with net income rising 41% year-on-year to $21.2 billion in the second quarter, supported by gains from the sale of Visa shares and equity investments.

Total net revenue increased to $57 billion from $45 billion a year earlier. The bank reported earnings of $7.70 per share, ahead of analysts' expectations of $5.64 per share.

Chief Executive Officer Jamie Dimon said, "The results were the product of a particularly favourable environment with an elevated level of market activity, as well as rigorous execution, years of consistent investment and thoughtful capital deployment."

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One-time gains support earnings

JPMorgan said its profit was boosted by a $4.6 billion net gain from the sale of Visa shares held by its corporate division. The bank also recorded $1 billion in gains from certain equity investments.

Excluding these one-off gains, net income stood at $16.9 billion, which was still above analysts' expectations.

Dimon said the US economy had remained resilient this year, citing artificial intelligence-driven capital investment, fiscal stimulus and deregulation as supporting factors.

"Several risks are shifting below the surface like tectonic plates, including geopolitical tensions and wars, sticky inflation, large global fiscal deficits and elevated asset prices. We cannot predict how these forces will ultimately play out," he cautioned.

How AI is reshaping JPMorgan
Speaking to CNBC on whether JPMorgan was understating AI's potential to drive efficiency, Dimon said the technology would help the bank "do a better job for clients".

JPMorgan currently has nearly 1,000 AI use cases spanning risk management, fraud detection, marketing, hedging, client prospecting, note-taking, idea generation and document analysis, Dimon said. While the technology has already enabled workforce reductions of 30% to 40% in some areas, he said most affected employees were redeployed elsewhere within the bank.

Chief Financial Officer Jeremy Barnum also said the AI boom was helping fuel trading activity, contributing to the bank's strong equities performance. Barnum added that AI was influencing financial markets broadly and that its impact was beginning to show in the real economy as well.

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JPMorgan's results mark the start of the second-quarter earnings season for major US banks. Other lenders, including Bank of America, Citigroup, Wells Fargo and Goldman Sachs, are also scheduled to report their quarterly results on Tuesday.