JPMorgan’s markets business booming after record quarter

[NEW YORK] JPMorgan Chase has seen balances within its prime-brokerage business soar to a record as clients look to seize on volatility in recent weeks.

The bank’s clients are generally bullish and have unwound some hedges they put on in the early weeks of the Iran war as they shift their focus to US corporate earnings, said Claudia Jury and Scott Hamilton, global co-heads of sales and research.

“Clients are actively trading and they are adding risk,” Jury said in an interview. “People are trying to take advantage of some of this volatility despite the uncertainty in some of the geopolitical narratives that we have at the moment.”

Jury and Hamilton are among the ranks of senior JPMorgan executives in Paris this week to convene hundreds of clients for the firm’s annual Global Markets Conference. Their comments come just weeks after the Wall Street giant reported an US$11.6 billion trading haul for the first quarter – an all-time high that was up 20 per cent from a year earlier. 

“It’s been a booming quarter,” JPMorgan’s co-chief executive officer for Europe, the Middle East and Africa, Matthieu Wiltz, said in an interview with Bloomberg TV on Tuesday (May 12). “It’s interesting to see that for I think the first time, we have such a big conflict with limited impact on the market.”

Wall Street trading desks have been on a hot streak since President Donald Trump won the 2024 election. His policy moves have repeatedly whipsawed markets across equities, rates and commodities, boosting client activity and the money banks make from facilitating those trades.

“Supply chains, commodities and Middle East tensions are probably the three things that are top-of-mind for our clients at the moment,” Hamilton said. 

The volatility has been a boon for banks’ prime-brokerage businesses, which involve lending hedge funds cash and securities to help execute their trades. Citigroup said this month it is aiming to boost its prime brokerage balances to more than US$700 billion by 2028 – more than triple the amount it had in 2022 – as the bank seeks to deepen its ties with hedge fund clients.

JPMorgan’s clients are also eager to discuss artificial intelligence, including how the bank itself is using it, Hamilton and Jury said. As one example, they pointed to a new tool that lets customers quickly sift through 10 years of research.

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“We’re really trying to bespoke the way that we communicate with our clients, and we personalise those interactions,” Hamilton said. “A lot of that is coming from AI.” BLOOMBERG