On Friday JP Morgan crushed expectations for their 1Q numbers with revenue of $28.52 billion (up 10%) and Net Income of $8.71 billion (up 35%). Thanks to share buybacks, their EPS was up an even more impressive 44%.
The most obvious tail wind for the company is the lower tax rate in the US. Even though JP Morgan had $2 billion more in Net Income, they paid $240 million less in tax! The next positive for the bank is the increasing interest rates in the US, remember that rates are going to continue rise. Good news for shareholders.
A Banks' performance is generally linked to the economy and by extension to the consumer. Thanks to low unemployment and high consumer sentiment, JP Morgan have seen an increase of credit card volume by 12% and merchant processing volume up 15% (good news for Visa). We won't see another tax cut, but you can expect interest rates and consumer spending to continue to be a tail wind for JP Morgan. Buy the bank.