JPMorgan Chase (NYSE:JPM) stock is gaining 1.5% in Monday premarket trading after the Wall Street bank upped its 2022 net interest income guidance at its investor day event, factoring in the Federal Reserve’s hawkish turn in recent meetings and high single-digit loan growth.
The firm now expects 2022 net interest income exceeding $56B, up from its previous guidance of $53B+, as it expects NII growth to ramp up over the course of the year. JPMorgan (JPM) now projects a Q4 NII run rate of $66B+.
Meanwhile, JPM’s expense outlook remains at ~$77B.
And the company’s credit outlook remains positive, management said. 2021 net charge-offs, at 0.30% for the entire firm, stood at historic lows. Eventually, charge-offs will return to pre-pandemic levels. However, “strong consumer and wholesale balance sheets will delay normalization past 2022.”
“The U.S. economy remains fundamentally strong, despite recent mixed data,” the company said. And while, “recent developments have increased the risk of a future adverse outcome,” its “fortress principles are designed to withstand any operating environment.”
The bank is keeping its return on tangible common equity at ~17%, which may be achieved in 2022. It targets common equity tier 1 ratio of 12.5%-13.0% at Q1 2024.
As the regulatory capital environment is in transition, JPMorgan’s (JPM) stress capital buffer “may be skewed higher.” Global Systematically Important Bank surcharge is expected to stay at 4.5% at Q4 2022.
Previously (April 13), JPMorgan Chase Q1 earnings missed as it braces for higher risks ahead