With JPMorgan reporting earnings this morning, and beating estimates, I'm a happy owner who is once again reminded of the virtues of having top-notch management at the head of the companies they own.
JPM beat bottom-line estimates by $0.10 this morning ($0.74 v. $0.64), and the details in the release were quite sound. Credit provisions were pretty sound, and Dimon was damn-near ebullient when talking about the business and it's near-term prospects. Dimon, like most bankers, is not a guy given to blowing sunshine, so for him to get excited means something to me.
I-banking was really, really strong this period. I don't have a great sense of their marketshare yet, but my sense of it is that they're definitely making some gains.
Retail banking and credit cards were both soft. Is anybody surprised? I thought it was interesting to see the provisioning in both businesses to be roughly equal, even though the banking business is quite a lot bigger. Of course, most people will save their house before they'll save their plastic, so it's not a huge shock.
The one thing I'm not thrilled about was the ROE. I mean, ROE comes down to math and I'm not shocked that this metric didn't pick up, but it's the one issue I'm worried about. As a matter of fact, I would not be surprised to see Dimon over-provisioning the company and seeing a sizable jump in that ROE in a couple year's time. In the meantime, this company is quickly starting to leave some of its would-be competitors in the dust.
I'm a happy owner here and I'll continue to be an owner. And these results should make anybody holding shares of banks like BB&T, USBancorp, Bank of America, et. al feel a lot more comfortable.
Disclosure - I own shares of BBT and JPM
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