(Bloomberg) -- JPMorgan Chase & Co. cut its annual forecast for net interest income, joining rivals in damping expectations as low rates and tepid loan growth weigh on revenue.
The largest U.S. bank’s NII for 2020 will probably be $55 billion, down from an earlier forecast of $56 billion, Chief Financial Officer Jennifer Piepszak said at a virtual investor conference Tuesday. Third-quarter trading revenue will likely jump 20% from last year, she said.
Consumers are saving more and paying down credit-card loans and mortgages during the pandemic, leading to lower loan growth, Piepszak said. Citigroup Inc. said yesterday that a drop in interest income would outweigh a trading revenue increase this quarter, while Wells Fargo & Co. also cut its full-year forecast for net interest income, which is revenue from customer loan payments minus what the bank pays depositors.
JPMorgan shares fell 1.5% to $100.93 at 11:16 a.m. in New York. They are down 28% this year.
JPMorgan will likely keep its loan-loss reserve constant this quarter, Piepszak said. That differed from Citigroup, which plans to increase its reserve.
Other takeaways from Piepszak’s comments:
- JPMorgan also raised expense outlook to $66 billion for 2020, from $65 billion.
- Investment banking revenue will likely rise in the third quarter by a “mid-single-digits” percentage, she said.
- Firm would consider buybacks in 4Q if regulators allowed.
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