Tomahawk, WI 8/12/2013 (Basicsmedia) – When making investments, one of the things investors look at is whether the company has potential for future growth. JPMorgan Chase & Co (NYSE:JPM) has come under sharp focus of late and this has been because of several reasons, some of which we will take a look at in this article. When a person hears questions being raised about a company’s ability to sustain or undertake future growth to the level required of it, he/she may think that the business is about to collapse. This is not true since companies may exist as they are without growth, and more importantly, without collapsing.

How Has JPMorgan Performed Thus Far?

Before investors read what I don’t intend to pass out as my message, let me start by saying that it is on record that JPMorgan has always performed better than analysts had estimated. Every time you look at its financial results and focus on earnings and revenue, you will notice that JPMorgan has continuously performed much better than analysts had given it credit, or were willing to predict. The fact that it has posted better earnings and revenue in the past, is not to say that the company can or will continue achieving the same going forward. It could succeed or fail in this endeavor.


JPMorgan Chase & Co (NYSE:JPM)’s Rankings in terms of Syndicated Loan

Revenue according to

However, one area where JPMorgan makes money from is in mortgages. Unfortunately, mortgage rates are at the highest levels ever within the last two years. This is one development which has convinced JPMorgan that it may not be able to sustain future growth since it stands to lose between 30%-40% of business and revenue it collects from mortgage applications. This is a significant amount regardless as to whether JPMorgan has enough cash flow to support its operations and service its debts in future. It will have to think of raising the shortfall in revenue from other sources.

Can JPMorgan Margins and Growth Support Future Growth?

Fortunately for JPMorgan it has reported that it has more than $432.8 billion in deposits. This is a rise of around 3% from what the company managed to raise in the last quarter, prior to the latest one. However, it is worth mentioning that the company saw its net interest margin dropping from 2.83% to settle at 2.60%. What the bank might have lost as a result of this huge fall in its margins, it more than made up for through its good performance in other areas of business. This growth is set to continue as more retail investors bring their businesses back to the bank.

What is the Future Outlook for JPMorgan?

JPMorgan is faced with a herculean task in terms of being able to support the bank’s future growth. A few of the factors it needs to work in its favor so as to achieve this goal, are beyond its control. An example is that unless the U.S economy slows down significantly, the bank may not achieve its goals for the future. The economy needs to slow down for the mortgage rates to fall and enable the bank to attract more people to make mortgage applications. Unfortunately, I don’t see that happening any time soon, and this will have a significant bearing on the bank’s growth.

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