NEW YORK–The nation’s largest bank is reporting a huge rebound in earnings, with other banks also reporting significant gains. Some of the earnings gains are related to releasing reserves that had been set aside at the beginning of the pandemic.
JPMorgan Chase reported $14.3 billion in profit for the first quarter of 2021, up from $2.9 billion a year ago, while Goldman Sachs reported $6.8 billion in earnings, up from $1.2 billion. JPMorgan reported revenue of $32.3 billion. It posted a credit costs net benefit of $4.2 billion, $5.2 billion of net reserve releases and $1.1 billion of net charge-offs. The bank continues to hold $26 billion in credit reserves.
The bank said its average loans were up 1%, while deposits mirrored the trend seen at credit unions by rising 36%. Also reflecting the pandemic, it reported active mobile banking customers were up 9%.
Positive About Future
“In consumer and community banking consumer spending in our businesses has returned to prepandemic levels, up 14% versus the first quarter of 2019,” said CEO Jamie Dimon. “We are also seeing good momentum in travel and entertainment with spend up more than 50% in March versus February. Home lending originations were very strong, up 40%, with almost 75% of consumer mortgage applications completed digitally, but we expect this to slow with the recent rise in interest rates. Loan demand remained challenged as card outstandings remained lower despite spend recovering to pre COVID levels.
“With all of the stimulus spending, potential infrastructure spending, continued quantitative easing, strong consumer and balance sheets and euphoria around the potential end of the pandemic, we believe that the economy has the potential to have an extremely robust, multi-year growth,” he added in a statement.