JPMorgan raises 2024 interest income forecast to $91 billion

On Monday, JPMorgan Chase increased its forecast for net interest income (NII) to $91 billion, excluding the markets division, highlighting the difference between what it earns on loans and what it pays out on deposits. The bank’s shares rose approximately 1% in premarket trading ahead of its investor day event scheduled to begin later in the morning in New York.

Analysts had previously expressed disappointment with JPMorgan’s NII forecasts, anticipating greater benefits from consistently higher interest rates. In April, the bank had raised its NII forecast to $89 billion from an earlier $88 billion, excluding the markets division. However, including trading, the company maintained its NII forecast at $90 billion.

JPMorgan’s acquisition of billions in loans following its purchase of the collapsed First Republic Bank last May significantly boosted interest income and drove profits to a record high. Chief Financial Officer Jeremy Barnum had cautioned for months that these gains might not be sustainable.

The bank also disclosed that it expects total expenses in 2024 to be approximately $92 billion, higher than previous expectations, to account for a $1 billion foundation contribution, according to an investor presentation.

Following a year of record profits, investors are keen to learn about JPMorgan’s succession plans, its investments in artificial intelligence, and opportunities beyond traditional banking. CEO Jamie Dimon, 68, has led JPMorgan for over 18 years, outlasting many of his peers in the industry. The succession plans have long been a topic of speculation, with Dimon previously indicating that he could step down in 3.5 years.

JPMorgan’s board has identified Jennifer Piepszak and Troy Rohrbaugh, the co-CEOs of its commercial and investment bank, as potential successors. Marianne Lake, CEO of consumer and community banking, and Mary Erdoes, CEO of asset and wealth management, are also considered contenders.

In 2024, JPMorgan’s stock has surged by 20.4%, surpassing both an S&P index of bank shares and the broader equity markets. It closed at a record high on Friday.

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