JP Morgan is one of the largest financial institutions in the world. It is counted as one of the well-known Big Four banks in the US. JP Morgan has a diversified business model with business segments in investment banking, retail banking, commercial banking, and asset management. JP Morgan is a leading player in whatever segment it operates in. Additionally, the bank has a large network of retail locations that provide it with lower-cost deposits. JP Morgan balances its retail business with investment banking and trading operations. This balance was especially critical during the year 2020 when retail operations were hit because of the pandemic. JP Morgan was able to offset some of the fall in income with higher trading activity to take advantage of the volatility in global markets.
JP Morgan Reports Q32020 Earnings
JP Morgan reported its third-quarter 2020 earnings in October 2020. Revenues, at $29.1 billion, were almost the same as compared to the revenues in the third quarter of 2019. Net income, on the other hand, was 4% higher at $9.4 billion as compared to $9 billion in Q32019. Earnings per share were up 9% year-on-year to $2.93 as compared to $2.69 in Q32019. The CET1 ratio also improved from 12.3% to 13%.
According to JP Morgan CFO Jennifer Piepszak, “Net interest income was down approximately $1.2 billion or 9% on some lower rates, partly offset by higher Markets NII and balance sheet growth. And noninterest revenue was up $1.2 billion or 7%, primarily driven by CIB, including higher banking and markets revenues as well as net securities gains in corporate.”
If you are looking to buy bank stocks, then JP Morgan is certainly one candidate. Its stock is up 3.2% in the last month. Over a 5-year period, the stock has almost doubled. Another big bank, Bank of America, is also worth considering. Its stock is up 6.6% in the past month and over a longer 5-year period, the stock is almost double.