Profit at Goldman Sachs Group Inc jumped amid a merger boom, while JPMorgan Chase & Co’s results were boosted by the impact of the recovering US economy on loan quality, according to results released on Tuesday.
The financial heavyweights reported soaring second-quarter profit compared with the previous year, when large banks set aside massive reserves in case clients defaulted amid the COVID-19 downturn.
However, widespread access to COVID-19 vaccines and the accelerating reopening of the US economy have put those days in the rearview mirror.
At JPMorgan, which has a significant retail operation in addition to investment banking, combined debit and credit card spending was up 45 percent from the previous year and more than one-fifth higher than in the pre-pandemic 2019’s second quarter, JPMorgan chief executive Jamie Dimon said.
He highlighted “exceptionally strong” consumer and business balance sheets.
However, the much sunnier outlook includes some continued question marks surrounding the course of the pandemic.
The rapid spread of the Delta variant of SARS-CoV-2 is one factor creating “elevated uncertainty” about the bank’s outlook for “a very robust recovery,” JPMorgan chief financial officer Jeremy Barnum said.
Goldman Sachs chief executive David Solomon also cited the pandemic as a potential source of economic trouble, noting this month’s tightening of restrictions in Hong Kong and Australia.
Vaccine coverage “is not consistent across communities and nations, including parts of the United States,” Solomon said on a conference call with analysts. “Widespread vaccine distribution and high vaccine rates are critical to open and thriving economies.”
The biggest US bank by assets, JPMorgan began the earnings season for the sector, reporting that profit more than doubled to US$11.9 billion in the second quarter, including a boost from US$3 billion that had been set aside as reserves.
JPMorgan had budgeted US$8.9 billion for bad loans in the second quarter last year, but it reported just US$734 million in charge-offs for defaults in the second quarter this year.
However, revenue for the period fell 8 percent to US$30.5 billion, as the bank’s trading business saw much less activity compared with the previous year.
Bank executives also expressed little optimism about loan growth, given the healthy state of US consumer finances following government stimulus programs.
Loan growth is going to be “a little bit of a slog through the rest of this year,” Barnum told reporters.
While “unusually high” pay rates for credit cards are “a healthy thing for consumers, it does create a bit of a headwind for our loan growth,” he said.
JPMorgan posted record global investment banking fees of US$3.6 billion in the second quarter, driven by heavy merger and acquisition activity.
At Goldman, profit came in at US$5.3 billion in the second quarter, compared with US$197 million the previous year, when results were dented not only by provisions for bad loans, but from elevated legal costs.
Revenue was US$15.4 billion, a 16 percent increase and the second-highest quarterly revenue in the firm’s history after the first three months of this year.
Goldman’s results reflected a jump in financial advisory revenue due to a rise in completed mergers and acquisitions.
PharmaEssentia Corp (藥華醫藥) shares have jumped 80.56 percent since the company obtained a US polycythemia vera (PV) drug license for its new interferon drug Besremi (ropeginterferon alfa-2b-njft) on Nov. 12. Shares on Friday closed at NT$195 in Taipei trading, up from the stock’s closing price of NT$108 on Nov. 12. PV is a rare, chronic and life-threatening blood cancer linked to a stem cell mutation in the bone marrow that results in an overproduction of blood cells and places sufferers at risk of having a blood clot, stroke or heart attack. PharmaEssentia is preparing to make Besremi available in the US in the
The US$410 DeliSofter pot looks much like the rice cookers ubiquitous in Japanese households and it does prepare rice in 24 minutes. However, this invention of two Panasonic Corp engineers is designed to do more and help people with swallowing difficulties. The two women led the creation of a spin-off company, Gifmo Co, to sell the specialized steam cooker, which they say can turn fried chicken soft enough to be sliced with a potato chip. The machine works by first cutting into food with a series of blades and then subjecting it to extremely high pressure at a temperature of 120°C,
Google’s Irish subsidiary has agreed to pay 218 million euros (US$244.94 million) in back taxes to the Irish government, company filings showed on Thursday. The US tech giant, which had been accused of avoiding tax across Europe through loopholes known as the “Double Irish, Dutch Sandwich,” said it had “agreed to the resolution of certain tax matters relating to prior years.” Google Ireland Ltd said it would pay corporation tax of 622 million euros for last year, including the 218 million euros of backdated tax settlement and interest charges. The previous year, Google Ireland paid taxes of 263 million euros. The company, which is
Ginko International Co (金可國際), the nation’s biggest maker of contact lenses, yesterday said that its board of directors approved a takeover bid of NT$27.18 billion (US$976.43 million) by Glamor Vision Ltd and its subsidiary Glamor International Ltd. The Glamor offer was to buy all 97.07 million Ginko shares for NT$280 each, Ginko said in statement submitted to the Taiwan Stock Exchange. That represents a premium of 38.61 percent compared with Ginko’s closing price of NT$202 on Thursday. After the transaction, Ginko would become a private company, with all shares delisted from Taipei Exchange, the statement said. The firm’s global headquarters in Taichung and its