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JPM Results Mixed But Positive FY24 Revenue Guidance

FINANCIALS SECTOR
JPMorgan (JPM US) 4Q23 results out... revenues broadly inline, another big FDIC hit (USD2.9bn), net income and EPS both miss, even adjusted was lower than expectations on higher credit costs. CEO Dimon is giving very bullish guidance on the wires re: FY24 revenues, should be supportive to equity price.
  1. Revenues are +12% y/y (+7% ex-acquisitions), underlying cost growth looks like 13% (some talk of front office incentive payments) and credit losses were double the 3Q23 figure which is a concern. Reserve building was, again, seen and delinquency and net charge-offs were likewise in US retail bank.
  2. IB revenues were better than BAC with FICC +8% though equities down a similar amount (a much smaller business anyway). Both ECM and DCM higher with M&A advisory weaker (very similar to BAC). Generally pretty positive laterals for the whole industry though JPM is often the "high water mark" for the majors (GS and MS viewed separately).
  3. BBG is reporting CEO Dimon guiding to USD90bn for net interest income (NII) in FY24, fully USD4bn above current consensus and quite the divergence from general expectations that rate tailwinds for US bank revenues were coming to a close. This is a real positive across the US domestic industry.
Credit markets will have their eye closely on the non-performing and net-charge off trends in these figures (both worsening both no acceleration in that from 3Q23 figures). That revenue news is a key positive though - conf call will be interesting to hear why this guidance is so much better than expectations (and why peers aren't saying similar).
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