On Monday, JPMorgan Chase & Co gave a more positive profit projection as it launched an investor conference, assuaging concerns that the country's largest bank by assets was losing its competitive advantage.
Because banks gain from increased interest rates, investors are keeping a watch on the chances for banks to raise their net interest income, or the difference between income from loans and interest paid on deposits and other money. JPMorgan now expects net interest income (NII) of USD56 billion in 2022, excluding markets. NII outside of the bank's market operations is expected to reach a "few billion" more than USD53 billion in 2022, up from a USD50 billion prediction in January. In premarket trade, the company's stock was up 1.8 percent at USD119.50.
JPMorgan's NII forecast for 2022 is predicated on the premise that the US Federal Reserve will raise short-term rates to 3% by year's end. It also expected a "moderate" increase in securities investments and high single-digit loan growth. The company also reiterated its goal of achieving a 17 percent return on tangible capital equity (ROTCE) by 2022. ROTCE is a significant metric that assesses a bank's ability to generate profit from shareholder funds.
The bank forecasts investment spending growth to "slow" in 2023, while the expense prediction for 2022 remains intact at USD77 billion. Depending on the economic circumstances in 2023, JPMorgan may change some of its investment spending plans, such as credit card marketing.
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