JPMorgan Chase's results do not reflect a rebound in the bank's fortunes as much as the fact that it took money out of reserves, Dick Bove, banking analyst at Rochdale Securities, told CNBC Thursday.
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JP Morgan Chase
Bove, who has a "buy" rating on JPMorgan's stock, said he would have liked to see better revenue from the bank.
JPMorgan's net profit per share was $1.09 in the second quarter, compared with the analysts' consensus forecast of 67 cents and up from earnings per share of 28 cents in the second quarter of last year.
Revenue was of $25.6 billion in the second quarter, in line with expectations.
"On the whole this number is not a good number… it's here because they've taken money out of reserves and put it into earnings," Bove said.
JPMorgan said its net income increased to $4.8 billion and benefited from a $1.5 billion reduction of loan loss reserves in the second quarter.
"The one metric that is very good is that their non-performing assets are down," he added.
But other sectors suffered.
Investment banking fees at JPMorgan fell by 37 percent to $1.4 billion; of these, stock underwriting fees posted the heaviest fall, of $354 million, or 68 percent, debt underwriting fees fell 6 percent and advisory fees were down 10 percent.
"Trading was devastating," Bove said.
The bank will probably give up "a few million customers who are only marginally profitable" as a result of the new financial regulations bill, which will increase its costs, he predicted.
JPMorgan's results also include a $550 million charge related to a tax on bonuses of UK-based bankers.