Key facts
- JPMorgan Chase expects third-quarter investment banking and trading revenue to increase by mid-to-high teens percentage.
- Co-President Doug Petno cited robust deal activity and broad-based strength in investment banking and markets businesses.
- Petno noted management and board confidence is driving significant M&A activity, reaching levels not seen in some time.
- Goldman Sachs CEO David Solomon indicated that the bank's FICC business is softer than its equities business in Q3.
- Bank of America CEO Brian Moynihan forecast a 10% decline in industry-wide investment banking fees for Q3.
JPMorgan Chase anticipates a strong third quarter for its investment banking and trading divisions, with fees and revenue projected to increase by mid-to-high teens percentage, according to co-President Doug Petno. Speaking at the Barclays Global Financial Services Conference, Petno indicated that deal activity is robust and the bank is experiencing broad-based strength across its markets businesses.
Petno attributed the strong M&A outlook to management and board confidence, stating that activity levels are as high as the bank has seen in some time. This positive outlook contrasts with forecasts from other major banks. Goldman Sachs CEO David Solomon said on Wednesday that the bank's fixed-income, currencies and commodities (FICC) business is expected to be slightly softer in the third quarter compared to its equities business, though he noted there are still weeks left in September. Bank of America CEO Brian Moynihan had said on Monday that industry-wide investment banking fees are expected to fall about 10% in the third quarter.
In the second quarter, JPMorgan's investment banking fees had jumped 30% year-on-year, while its markets revenue surged 35%. Petno also commented on potential acquisitions, stating that the bank has a "shopping list" but maintains a very high bar for inorganic opportunities, ready to acquire at the right valuation during market disruptions. Regarding succession planning, Petno confirmed that CEO Jamie Dimon remains actively involved.