JP Morgan produced extremely strong earnings numbers today. Net income was $5.38 billion and the earnings were balanced through the retail banks and the investment bank. JP Morgan is really a behemoth with simply amazing earnings power and Jamie Dimon has done a great job navigating the rough financial waters over the last several years. It’s amazing how profitable the large banks have been over the last couple of years even though their stocks are trading at such low levels in relation to book value. Mike Mayo had an interesting quote in this article:
“U.S. banks are in the middle of the industry’s worst two years of revenue growth since the Great Depression.”
There is no doubt that a confluence of factors have been working against financials but due to aggressive capital raises and improving cyclical conditions many of these companies have emerged with stronger and leaner operations which should shine through over the next several years.