JPMorgan earnings increase despite drag from mortgage lending

Earnings down slightly from Q1 but still up from 2017

In the second quarter of 2018, JPMorgan Chase saw a slight decrease in its earnings from the previous quarter, but still managed to increase from the previous year despite a drag from its mortgage banking sector. 

After climbing to $27.9 billion in the first quarter, JPMorgan’s revenue decreased in the second quarter to $27.8 billion. But this is still up from $25.7 billion, in the second quarter of 2017.

Net income followed a similar pattern, decreasing from the first quarter's $8.7 billion but rising from the second quarter of 2017's $7 billion to $8.3 billion in the second quarter this year. This is a total earnings per share of $2.29, up from $1.82 in the second quarter of 2017 and down from $2.37 in the first quarter.

The bank explained its increase from last year, saying that a rise in U.S. employment and moderate wage gains have resulted in strong consumer and business sentiment, which has produced tremendous economic growth.

“We see good global economic growth, particularly in the U.S., where consumer and business sentiment is high,” JPMorgan Chairman and CEO Jamie Dimon said. “Because of this broad growth and the strong underlying performance across each of our businesses, the company delivered record results this quarter. We also want to acknowledge that global competition is getting stronger.”

But while the bank is seeing higher revenues, the same can't be said for its mortgage banking revenue, which created a drag on total earnings. 

JPMorgan’s home lending sector slowed down, decreasing 11% in revenue in the second quarter as it fell from $1.5 billion in the first quarter to $1.3 billion in the second quarter. This is also down 6% from $1.4 billion in the second quarter last year. The bank explained this drop was predominantly driven by production margin compression and lower net servicing revenue.

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