JPMorgan forecasts jump in first-quarter deal fees, trading revenue

[NEW YORK] JPMorgan Chase expects investment banking fees and markets revenue to log strong growth in the first quarter, easing concerns that a recent equity market sell-off has hit deal pipelines.

Investor concerns grew in recent weeks that a market rout in software and technology firms, driven by fears of AI disruption, would hurt mergers and acquisitions as well as the IPO plans of high-growth technology startups.

Allaying some of those concerns, JPMorgan said it currently expects investment banking fees to rise by a mid-teens percentage, potentially reaching the high teens in the first quarter.

“We started the year strong. Pipelines were very good, and it was broad based. The one thing I will say in M&A (is that) there are powerful strategic drivers,” Doug Petno, Co-CEO of JPMorgan’s commercial and investment bank, said.

“I think a lot of these transactions will survive the volatility and carry on.”

JPMorgan also expects markets’ revenue to increase by a mid-teens percentage in the current quarter.

Trading volumes typically surge during periods of market volatility, as sharp price swings drive hedging, repositioning portfolios and seizing short-term opportunities, lifting banks’ fees from markets businesses.

Spotlight on succession

Jamie Dimon has led JPMorgan for two decades, and investors have long speculated about when he might step down, closely watching the bank’s senior executives for clues on a potential successor.

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Dimon has often reiterated that the bank’s board is focused on succession planning and that the lender has a cadre of “extremely” qualified executives prepared to run it eventually.

“I’m here for a few years as CEO, and maybe a few after that, as executive chairman, pending whatever the board wants to do,” he said at the bank’s Investor Day event in New York on Monday.

Under his leadership, the bank has climbed to the top of Wall Street by both assets and market value. JPMorgan now boasts a market capitalisation of more than US$800 billion, eclipsing the combined value of its two biggest rivals, Bank of America and Citigroup.

AI investments in focus

The bank kept its forecast for annual adjusted expenses unchanged at US$105 billion, as it pushes ahead with plans to modernise branches and invest in AI technology.

It expects to spend US$19.8 billion on technology in 2026, up 10 per cent from a year earlier.

“We continue to invest in AI and we’re seeing tangible benefits in multiple areas. Machine learning and analytical AI have been driving improvements in revenue,” chief financial officer Jeremy Barnum said.

UBS analyst Erika Najarian in a note wrote that the market views banks, particularly money-center lenders, as relative winners within financials from AI disruption.

The brokerage added that JPMorgan has consistently embraced technological shifts and that investors are “very keen” to hear its view not only on productivity gains from AI but also on its potential to drive revenue growth.

Consumer resilience

US banks have said that consumers are holding up well despite elevated interest rates and economic uncertainty, supporting card spending and keeping credit quality stable.

Large banks such as JPMorgan are seen as bellwethers for the US economy and closely watched as they offer insights into the health of consumer spending, borrowing trends and business activity.

JPMorgan executive Marianne Lake said the bank had not seen any deterioration at the lower end of the US consumer bracket, nor any new trends. She said “everything is solid” on the consumer front.

The bank is targeting a return on tangible common equity of 17 per cent. ROTCE is a key profitability metric that measures how efficiently a company uses its tangible equity to generate profits.

In January, JPMorgan reported a fourth-quarter profit that exceeded analysts’ estimates as its trading desk benefited from volatile markets. The bank beat Wall Street profit estimates in all four quarters of last year, according to LSEG-compiled data.

The bank’s shares rose 34.4 per cent in 2025, outperforming an index tracking large-cap US lenders and the broader equities benchmark.

The stock was up marginally in post-market trading. REUTERS