JPMorgan Chase, Wells Fargo Post Strong Q2 Earnings

JPMorgan Chase & Co. (NYSE:JPM) and Wells Fargo & Company (NYSE:WFC) posted healthy second-quarter profit on the back of the U.S. economy’s recovery.

JPMorgan Chase, Wells Fargo Post Strong Q2 Earnings

JPMorgan’s investment banking business shines

JPMorgan’s second quarter earnings rose 31 percent aided by strong growth seen at its investment banking business, coupled with reduction in reserves for loan losses.

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The top U.S. bank’s investment banking arm posted a profit of $2.84 billion, a growth of 19 percent over a year ago and about 9 percent from the previous quarter.

JPMorgan Chase & Co. (NYSE:JPM)’s second-quarter results got a boost from a release of $1.5 billion in loan loss reserves, as the bank continues to free up money it socked away to cover souring loans.

JPMorgan has reported earnings per share of $1.45 for the second quarter, as against $1.43 estimated by Anthony Polini of Raymond James.

The second-quarter saw healthy results from various divisions of JPMorgan Chase & Co. (NYSE:JPM). Mortgage originations rose 12 percent, while its credit card business rebounded with 10 percent increase in sales volume. JPMorgan’s asset management business saw 28 percent increase in its income, while its private banking revenue was up 11 percent during the second-quarter.

However, JPMorgan’s net interest income fell 4 percent at $10.9 billion, thanks to the low interest rates driven by the Federal Reserve.

Wells Fargo posted 14th consecutive rise in quarterly profit

The nation’s largest home lender, Wells Fargo & Company (NYSE:WFC), reported a 19 percent increase in second-quarter profit, as the bank overcame a slowdown in the mortgage market.

The fourth-biggest U.S. bank posted a second-quarter EPS of 98 cents, beating consensus estimates of 92 cents per share.

Even though a recent interest rate increase discouraged borrowers from refinancing their mortgages, the nation’s largest home lender recorded its 14th-consecutive increase in quarterly profit and ninth-straight record report.

The increase in interest rates also affected Wells Fargo’s refinancing business, which contributed only 54 percent of its mortgage applications as against nearly two-thirds in the first quarter.

Mirroring JPMorgan Chase & Co. (NYSE:JPM)’s results, Wells Fargo & Company (NYSE:WFC)’s net interest margin also declined to 3.46 percent as against 3.91 percent reported in the previous year and 3.48 percent in the previous quarter.