Why did JPM outperform forecasts in 2024?

JPMorgan Chase & Co. (JPM) outperformed forecasts in 2024 due to several key factors:

1. **Strong Investment Banking and Markets Performance**: JPM's investment banking and markets segments performed exceptionally well, with investment banking fees increasing by 31% year-over-year to $2.27 billion, and markets revenues growing by 8% to $7.2 billion. This was driven by robust global client activity and heightened market volatility, which benefited JPM's transactional and advisory businesses.
2. **Net Interest Income (NII) Growth**: Despite the impact of higher deposit costs, JPM's NII grew by 19.1% over the past year to $24.05 billion, primarily due to the high interest rate environment and modest consumer spending. The bank's management expects NII to be almost $22.9 billion in the fourth quarter and $92.5 billion in 2024, indicating a strong revenue stream.
3. **Cost Management**: JPM demonstrated effective cost management, with a substantial rise in managed revenue contributing to a 50% year-over-year increase in net income to $14.0 billion. This was achieved alongside a 21% increase in market revenue and a 46% jump in investment banking fees, reflecting heightened client activity and broader market enthusiasm.
4. **Diversified Business Segments**: JPM's diversified business model, spanning investment banking, consumer and commercial banking, and asset management, contributed to its robust performance. Each segment reported significant growth, with the Commercial and Investment Bank segment delivering an 18% year-over-year revenue increase.

In summary, JPM's outperformance can be attributed to its strong investment banking and markets performance, growth in net interest income, effective cost management, and diversified business segments. These factors collectively enabled JPM to exceed market expectations and achieve strong financial results in 2024.