JPMorgan on Pace for Another Strong Quarter of Trading Revenue

The bank's investment banking head said trading revenue in Q2 could be 50% higher on a year-over-year basis.

Second-quarter trading revenue at JPMorgan Chase (NYSE:JPM) is on pace to grow 50% from the second quarter of last year, the bank's head of corporate and investment banking said at a recent virtual conference.

Daniel Pinto attributed the increase specifically to fixed income and equities activity, but he cautioned that trading volumes are beginning to trend toward more normal levels, and may finish the year similar to what they were in 2019. 

He added that investment banking fees in the second quarter are projected to come in slightly higher, while merger and acquisitions activity continues to drag and will likely decline by 15% or 20%.

Although JPMorgan struggled in terms of overall profits in the first quarter of the year, there were a few small bright spots within the corporate and investment bank division.

Specifically, markets revenue of $7.2 billion grew 32% year over year, while fixed income markets revenue of $5 billion grew 34% year over year. Overall, the investment banking division still saw total profits drop 39% from the first quarter of 2019, largely as a result of credit reserve builds in the division.

Furthermore, the country's largest bank could still be facing a tough second quarter.

JPMorgan CEO Jamie Dimon recently said at a different virtual conference that the bank's quarterly credit provision, cash it sets aside to cover future expected loan losses, could be "roughly equivalent" to the $8.3 billion it set aside in the first quarter.