The collapse of Silicon Valley Bank resulted in gains for other banks. JPMorgan Chase and other big US banks reported record profits in the first three months of 2023, as they hauled in billions of dollars in deposits from consumers fleeing smaller lenders following the recent collapse of SVB.
With the highest 3-week rise of the KBW Bank Index, Bank of America Corp., Morgan Stanley, and Goldman Sachs Group Inc. all have joined the surge.
JPMorgan, Citigroup, and Wells Fargo's positive first-quarter profits demonstrate how larger US banks have profited when there is widespread concern about the safety of regional banks following the failures of SVB and Signature Bank. The greater profits also highlight how banks gained from the Federal Reserve's interest rate increases, which lenders have utilised to boost revenues without dramatically raising deposit rates.
JPMorgan Chase is one of the prime banks in the United States and a leading indicator of the US economy, with $3.67 trillion in assets. Its profits in the first three months of 2023 increased by more than 50% due to higher lending earnings (net interest income).
This New-York based bank also raised its forecast for net interest income for the remainder of 2023 by about 10% to around $81 billion. The stock gained 7.6% on Friday, its highest day since November 2020, above all S&P 500 Index rivals.
JPMorgan earned a massive $1.26 billion profit, i.e. $4.10 per share. It recorded a 52% increase in profit, as the previous year's profit stood at $8.3 billion ($2.63 per share).
Morgan CEO Jamie Dimon stated in a press statement — the US economy is still on solid ground. People are still spending and have robust balance sheets, and companies are doing well. However, the storm clouds they've been watching for a year linger on the horizon.
Additionally assuring its depositors, JPMorgan Chase stated its exposure to office property is restricted, citing worries that the $20 trillion commercial real estate market may be the next shoe to break following the banking saga.
—Kritika Singhal