JPMorgan stock (NYSE: JPM) price is steadily extending the upside momentum despite the low-interest-rate environment and difficulties in the core banking business. This is because the largest US bank has successfully been outperforming market trends and competitors.
Its revenue in the September quarter fell only 2% year over year compared to Bank of America’s (NYSE: BAC) revenue drop of 11%. Shares of third US largest bank Wells Fargo (NYSE: WFC) plunged 10% after the bank reported a 14% year over drop in September quarter revenue. JPMorgan stock jumped 9.44% in the past six months.
Investors ignored a bank fine of $920 million on market manipulations
JPMorgan is among the eight US banks that were fined by regulators this year for breaching different anti-money laundering policies and violating other banking guidelines.
The regulators have imposed a fine of almost $1 billion on JPMorgan for violations. Regulators imposed a $3.9 billion fine on Goldman Sachs while Wells Fargo is liable to pay $3 billion. The total fine on US banks stood around $8.53 billion in 2020, accounting for 74.89% of the total $11.39 billion bank fines globally.
Strong financial performance supports JPMorgan stock
JPMorgan has topped third-quarter revenue and earnings estimates by $960 million and $0.73 per share, respectively. Although it’s net interest income fell 9% year over year to $9 billion, its earnings per share of $2.92 grew sharply from earnings of $1.38 per share in the previous quarter.
The bank has dropped its credit-loss provisions to only $611 million in the September quarter compared to the consensus estimate for $2.88 billion. Credit-loss provisions stood around $10.47 billion in the second quarter. In addition, its trading revenue jumped 30% year over year to $6.6 billion.
“We further strengthened our capital and liquidity position, increasing CET1 capital to $198 billion (13.0% CET1 ratio, up 60 basis points after paying the dividend) and liquidity sources to $1.3 trillion. Home Lending benefited from strong production margins.” said Jamie Dimon, Chairman, and CEO.