JPMorgan Chase & Co posted higher second-quarter earnings on Thursday, beating analysts' expectations, after setting aside less money for loan losses.
JPMorgan, the first of the major U.S. banks to report second-quarter results, said credit losses broadly were slowing, sending U.S. stock futures higher and its own shares rose in premarket trading.
(JPMorgan) sets the bar high and gives people who invest in the sector reason to be optimistic, said Kim Caughey, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
The second-largest U.S. bank by assets said earnings jumped to $4.8 billion, or $1.09 a share, from $2.7 billion, or 28 cents a share, in the year-earlier period.
Investment banking net fell 6 percent to $1.38 billion. Some analysts had warned that investment banking results could be hurt by volatile stock markets in a quarter marked by worries over sovereign debt in Europe and a flash crash in the U.S. stock market.
JPMorgan reported a benefit of $1.5 billion, or 36 cents a share, from trimming its loan loss reserves in the quarter.
Excluding that benefit, the earnings beat analysts' average forecast of 67 cents a share, according to Thomson Reuters I/B/E/S.
The bank said its losses on consumer credit, such as mortgages, credit cards and other loans, dipped in the second quarter compared with both the first quarter and the 2009 second quarter.
But Chief Executive Jamie Dimon sounded a cautious note on the outlook for the U.S. economy. It is too early to say how much improvement we will see from here, he said in a statement.
Investors will be hoping to hear more buoyant comments during the bank's scheduled conference call with analysts later Thursday morning, said Matt McCormick, portfolio manager and analyst at Bahl & Gaynor.
All the attention's really going to come down to their outlook, he said.
JPMorgan posted a charge of $550 million related to a tax on UK bankers' bonuses. It previously warned about such a charge and said it would be a significant item in the quarter.
U.S. stock index futures rose following the earnings report by the bank, a component of the Dow Jones industrial average.
JPMorgan shares climbed 0.6 percent in premarket trading to $40.58. The shares are down 3 percent this year.
Bank of America Corp and Citigroup Inc are due to report second-quarter results on Friday.
(Reporting by Elinor Comlay; additional reporting by Ryan Vlastelica and Maria Aspan; editing by John Wallace)