What to watch for in JPMorgan Chase's Q2 results

The US bank had record revenue in Q1, but its Q2 earnings could be impacted by passing a Federal Reserve stress test and depending more on digital banking.

Chase building before JPMorgan Chase Q2 earnings Source: Bloomberg

JPMorgan Chase's share price may be affected by these three circumstances when it releases its Q2 earnings report July 16.

Analysts expect JPMorgan Chase’s Q2 revenue to increase

Analysts expect JPMorgan Chase’s Q2 revenue to top $29 billion, with 2.1% year-over-year growth. JPMorgan Chase already had a record Q1 results report with $29.9 billion in revenue. Financial experts also expect JPMorgan Chase’s Q2 earnings per share to grow 9.6% to $2.51.

Appealing to millennials could help JPMorgan Chase's Q2 earnings

JPMorgan Chase’s chief executive officer (CEO), Jamie Dimon, noted that many millennial customers are using the corporation’s Sapphire Card. Credit card sales volume rose by 10%.

‘We're gaining share in millennials every day,’ said Dimon.

Dimon noted that digital banking helps attracts customers in their 20’s that use the bank’s mobile app.

‘I mean we have a million people a day visit branches so millennials are doing it [visiting bank locations] less. We've got 50 million people on digital’, said Dimon.

JPMorgan Chase is also likely trying to attract young bank customers with its own bitcoin launch at the end of the year. The attempts to reach millennial clients could improve JPMorgan Chase’s Q2 revenue.

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Low interest rates may impact JPMorgan Chase's Q2 profits

Because the US Federal Reserve kept interest rates unchanged, large US banks like JPMorgan Chase could be under pressure around earnings season because low interest rates often mean less profit for banks, according to Short Hills Capital Partners’ Steve Weiss.

‘I just think it’s very tough given where [interest] rates are and where the [yield] curve is for them to make money,’ said Weiss.

Despite interest rates stagnating, JPMorgan Chase’s stock increased as the corporation passed Fed stress tests to determine if the bank has enough capital to withstand a financial crisis.

Investors will see if appealing to younger customers and passing Fed stress tests will help JPMorgan Chase’s Q2 earnings.


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