Top banks are not exempt from having to overcome the market’s falling refinance volumes. Mega bank JPMorgan Chase’s (JPM) volume reductions have been rapid and dramatic, with refinance applications off 60% since interest rates began rising in early May. Per Seeking Alpha:
Chase is looking to offset this by increasing market share in the purchase market, and notes this rose to 10.7% in H1 vs. 8.6% a year ago.
Overall, the bank insists it remains well-positioned for rising rates – models show $3.7 billion in extra income in the next year from a parallel 200 basis point rise in rates. This income would grow even more in subsequent years as JPM invests at higher yields. The capital impact would be small and manageable.