The shares of banking giant JPMorgan Chase slumped on Tuesday after its President and COO Daniel Pinto gave a grim prediction for expected net interest income in 2025.
Net interest income (NII) serves as the core measurement of a bank’s profitability in the lending and borrowing business. In the simplest terms, it is a difference between the figure that a bank earns from its loans and the figure it pays out for clients’ deposits.
It was previously expected that JPMorgan Chase’s NII for 2025 will come at $90 billion. According to Pinto, the actual NII figure will be in the “ballpark” but likely won’t match it due to expected interest rate cuts by the Federal Reserve.
“NII expectations are a bit too high,” Pinto said during a speech at a recent industry conference in New York. “Next year is going to be a bit more challenging.”
Pinto also added that the analysts’ estimates of $94 billion for expenses in 2025 are “optimistic” due to inflation and the new investments the bank has engaged in.
The investors took notice of Pinto’s comments, sending JPMorgan’s stock down by more than 5% on Tuesday. The stock, however, was around $205 per share after the drop but still remains 19.35% up year-to-date.