Optimism starting to bear fruit

The underlying numbers are what are going to really drive the future of this company, and we really feel good about what we see, was the springtime optimism that came from JPMorgan Chase head Jamie Dimon. Alas, the year was 2008, just after his firm had absorbed the failing Bear Stearns and just before the financial crisis.

A decade on, Dimon’s words finally ring true. On Friday JPMorgan reported first-quarter results that show the bank nearly in full bloom, though Dimon did not join the earnings call. The Fed’s tightening continues and higher rates drove net interest income up a tenth, to $13bn.

Volatility in the stock market pushed up equity trading revenues 25%. And, amplifying all those results, the Trump corporate tax cut lowered the bank’s tax expense by $240m, even as pretax earnings jumped by $2bn.

All this is neatly captured in JPMorgan’s return on tangible equity, which hit 19% — about double what big US banks were making a few years ago. Such profits and such a benign environment prompt the next demand: loosen capital rules so that as profits grow more can be siphoned to shareholders. JPMorgan is particularly focused on the charges associated with being a global, systemically important investment bank. It argues they are redundant with all the other constraints it faces. London, April 13