JPMORGAN Chase will gain an even bigger benefit from rising interest rates because of its purchase of First Republic Bank.

The biggest US bank raised its guidance for net interest income this year to US$84 billion, excluding its trading business, up from a previous forecast of US$81 billion, according to an Investor Day presentation on its website on Monday (May 22).

The lender said several “sources of uncertainty remain,” including the Federal Reserve’s plans and how consumers react to higher borrowing costs.

JPMorgan bought First Republic Bank earlier this month after it became the second-largest bank failure in US history and the fourth regional-bank collapse this year. JPMorgan chief executive officer Jamie Dimon, the only major bank CEO from the financial crisis still in command, said last week that “we need to finish the bank crisis” and regulators should “not be surprised constantly.”

The largest banks have been mostly immune to the problems plaguing their smaller rivals, with JPMorgan reporting a surprise jump in deposits in the first quarter as customers sought safety. Chief Information Officer Lori Beer said in a presentation Monday that the bank had increased its retail-deposit market share by about 60 basis points during the past year. It added roughly 600,000 net new checking accounts this year through April, the company said.

Shares of the biggest US bank, which are up 5.5 per cent this year, rose 1.7 per cent to US$141.58 at 9.32 am in New York.

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JPMorgan said in its presentation that the outlook for 2023 expenses remained unchanged at roughly US$81 billion, excluding the costs tied to the First Republic acquisition. It said those would total about US$3.5 billion. About half the integration costs will be borne this year, chief financial officer Jeremy Barnum said in a presentation at Investor Day.

“Credit remains benign, but we expect continued normalisation throughout the year,” the New York-based bank said. The lender has set aside reserves based on expectations for peak unemployment of 5.8 per cent in late 2024.

Speaking at the event, President Daniel Pinto said that while the economy is doing “fine” right now, there are signs of deterioration emerging. BLOOMBERG