JPMorgan Chase (NYSE:JPM) shares fell early Wednesday after the bank’s president told analysts that expectations for net interest income and expenses in 2025 were too optimistic.
While the bank expects to be in the “ballpark” of the 2024 target for NII of about $91.5 billion, the current estimate for next year of about $90 billion “is not very reasonable” because the Federal Reserve will cut interest rates, JPMorgan President Daniel Pinto said.
“I think that that number will be lower,” Pinto said. He declined to give a specific figure.
Shares of the New York-based bank dropped more than 7% earlier in the session for the worst decline since June 2020, according to FactSet.
JPMorgan, the biggest U.S. bank by assets, has been a winner among lenders in recent years, benefiting from better-than-expected growth in NII as the bank gathered more deposits and made more loans than expected. But skittish investors are now concerned about the outlook for a bellwether banking stock, along with broader concerns about slowing U.S. economic growth.
NII, one of the main ways banks make money, is the difference in the cost of a bank’s deposits and what it earns by lending money or investing it in securities. When interest rates decline, new loans made by the bank and new bonds it purchases will yield less.
JPM shares fell $1.93 to $203.66.
