(Finance) – JPMorganthe largest US bank, has increased 2022 guidance on Net Interest Income (NII), a key measure of profitability from lending. The NII (interest margin in Italian), excluding the contribution of the Markets division, is now expected at $ 56 billion in 2022while previously it was expected to be above $ 53 billion and earlier (in January) at $ 50 billion.
JPMorgan, which revised some forecasts on Capital Markets Day, said its 2022 outlook for the NII is based on assumption that the Fed increases short-term rates to 3% by the end of the year. In addition, loans are expected to grow at a “high single-digit” rate and a “modest” increase in investments in securities.
The US giant estimates that the bad credit charges will increase to pre-pandemic levels “over time”, but not before 2022, thanks to strong consumer and business balance sheets. Provisions to build loss reserves will increase as loans grow, added JPMorgan, which aims for a 17% ROTCE for the current year.