JPMorgan shares fall on more cautious interest income forecasts

By Nupur Anand and Pritam Biswas

NEW YORK (Reuters) – Shares of JPMorgan Chase fell about 6% after the bank's president tempered interest income expectations on Tuesday.

President and Chief Operating Officer Daniel Pinto said forecasts for net interest income (NII), the difference between the bank's loan income and deposit payments, were too optimistic.

“NII expectations are a little too high,” Pinto said, without giving a revised estimate. “Next year will be a little more challenging.”

JPMorgan had previously forecast that its NII would rise to $91 billion this year, excluding the markets division.

Meanwhile, investment banking fees could rise 15 percent in the third quarter, Pinto said.

JPMorgan's profit rose to a record level in the second quarter, driven by a 46 percent increase in investment banking revenue. Rivals such as Citigroup and Wells Fargo also reported strong gains in investment banking.

Revenue at JPMorgan's newly merged commercial and investment banking unit also rose to a record $35.5 billion in the first half of the year.

Trading revenue is expected to stagnate or increase by two percent in the third quarter, while mergers and acquisitions volumes are likely to remain stable, Pinto told investors at a conference.

The second quarter saw a 10% increase, with equity revenues jumping 21% and fixed income revenues rising 5%.

(Reporting by Nupur Anand in New York and Pritam Biswas in Bengaluru; Editing by Lananh Nguyen)