JPMorgan Chase (NYSE:JPM) beats first-quarter expectations with strong showing on April 13
JPMorgan Chase beat analysts' first-quarter expectations when it released its earnings on April 13, 2016. The bank reported that its non-interest expenses fell to under $14 billion. This was the first time the category had been at that level in six years. The reported net interest margin for the quarter also increased to 2.3 percent, a figure which should be expected to continue rising as the Fed increases the interest rates over the upcoming quarters.
The company also said it was acquiring a minority share in Global X, an exchange-traded fund provider. The ETF industry has been growing very rapidly, and JPMorgan's decision to increase its exposure should help the bank to return higher margins for its business division. Almost 10 percent of JPM's total value is attributable to the bank's asset-management arm. The bank has made a string of changes, including cutting 5 percent of wealth management jobs in Asia. The bank now also requires its private banking clients to make minimum investments of $10 million instead of $5 million, a move that has allowed it to cut back on the number of its advisors for private banking substantially.
JPM announces launch of JPMorgan Diversified Return U.S. Mid Cap Equity ETF (NYSEARCA:JPME) on May 13
On May 13, JPM announced it is launching a new strategic beta ETF, the JPMorgan Diversified Return U.S. Mid Cap Equity ETF. The ETF will monitor the Russell Midcap Diversified Factor in order to help investors spread risk more evenly across their portfolios. This newest ETF is one of eight products in JPM's suite, showing the kind of additional exposure to the ETF markets the bank previously talked about in April.
JPM ramps up its drive for tech patents
In a bid to stave off threats from fin tech companies and emerging technologies for business model-changing, JPM has ramped up its drive to patent its own technology. This could help the bank by preventing it finding itself blocked from its own technological inventions. It will also do so in order to protect its investments in innovation such as analytics and mobile banking. While also protecting JPM, getting the tech patents it seeks should also function to prevent fin techs from using its technology for their own purposes.
CEO Jamie Dimon gets into verbal war with ICBA lobbyist Camden Fine
Also of interest is the brewing battle between JPM's CEO, Jamie Dimon, and Camden Fine, the CEO and president of the Independent Community Bankers of America, a lobbying organization representing thousands of small banks. Dimon had called for interdependence between large and small banks in a column. Fine reacted to it by ridiculing Dimon, stating that the actions of big banks like JPM is what led to the tightened regulatory pressures on smaller banks. Dimon, in turn, called Fine a jerk, and Fine then reacted by comparing him to the evil bank in "It's a Wonderful Life." It will be interesting to see if the rift widens further.
Conclusion: Buying Time
JPM is showing many positive signs, with its heightened focus on ETFs, its increased margins and the likely action of the Fed to raise benchmark interest rates in the upcoming months. As JPM appears poised to increase in value, now might be a good time for investors to buy JPM shares.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.