JPM Results: Muted Guidance But Few Issues To Push Spreads Wider

JPMorgan 1Q24 results actually beat on headline numbers but include some sub-consensus forward guidance. Capital and credit quality appear solid but these results shouldn’t alter spreads much, we feel.

• Key credit metrics: CET1 ratio is 15.3% (advanced basis), up 30bp on Dec-23 and marginally ahead of consensus. Net charge offs in the retail bank are 96bp (down 2bp from 4Q23) and overall credit costs are lower, too. Non-performers are broadly stable, aside from an uptick in home lending.
• Revenues: FICC is 7% lower y/y (driven by rates and commodities), equities are relatively flat and both DCM (+81%) and ECM (+10%) lines are well ahead of expectations, albeit with a 20% slowdown in M&A advisory. This is a positive lateral for Deutsche, Barclays, BoA and Goldman overall.
• Outlook: questions will likely be asked around non-performers on the call, alongside the muted guidance on revenues. Guidance is for NII of around USD90bn (about 1% lower than consensus) and expenses of around USD91bn, slightly more than consensus. It would seem the “higher for longer” impact from US rates isn’t (yet) being seen here. Comments from the media call indicate a cautious IB revenue outlook, too.