By Arasu Kannagi Basil and Nupur Anand
Sept 15 (Reuters) – JPMorgan Chase expects investment banking fees and trading revenue growth to be strong in the third quarter, co-President Doug Petno said at an investor conference on Tuesday.
Shares of the largest U.S. lender erased earlier losses and closed up about 0.7%, as the comments calmed some nerves after Bank of America’s weak forecast on Monday triggered a selloff in U.S. big bank stocks.
Speaking at the Barclays Global Financial Services Conference, Petno said investment banking fees and markets revenue were expected to be up “mid-to-high teens” percentage in the third quarter.
Deal activity is robust and JPMorgan was seeing broad-based strength in investment banking and markets businesses, Petno said.
“We started this quarter with a strong pipeline that continues. I touched on management and board confidence-that’s driving tremendous amount of M&A activity. It’s as high as we’ve seen in some time,” he said.
JPMorgan’s investment banking fees jumped 30% in the second quarter from a year ago, while markets revenue surged 35%.
Clients are incredibly resilient and seeing through the market volatility and the fog of uncertainty, which reflects the diversity and strength of the U.S. economy, Petno said.
Wall Street is closely watching the industry conference for commentary on deal pipelines and updates on consumer health from major U.S. banks.
Asked about JPMorgan doing acquisitions, Petno said the bank was in the market constantly, but the bar is “very high” for inorganic opportunities.
“We are ready to opportunistically acquire. We have sort of a shopping list if it makes sense, but at the right valuation if there’s a market disruption,” Petno said.
JAMIE DIMON IS NOT STEPPING BACK
In June, JPMorgan elevated insiders Petno and Troy Rohrbaugh to co-presidents as the bank reshuffled its top ranks to set up a new succession plan.
JPMorgan CEO Jamie Dimon is not stepping back, Petno said, adding he was active as ever and out in the market all the time.
“The company is big. We’re scaling rapidly. We have big, big plans, big ambitions. So there’s a lot for Troy and I to do to give him leverage to round us out as executives,” Petno said.
Petno and Rohrbaugh were previously co-CEOs of the commercial and investment bank at JPMorgan.
“We had a very high-functioning partnership as co-heads of CIB. Mobility is a fantastic thing when you move lift somebody up and move them around the company,” Petno said.
(Reporting by Arasu Kannagi Basil in Bengaluru and Nupur Anand in New York; Editing by Arun Koyyur)
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