Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Nyse  >  JPMorgan Chase & Co.    JPM

JPMORGAN CHASE & CO.

(JPM)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsPress ReleasesOfficial PublicationsSector newsMarketScreener StrategiesAnalyst Recommendations

Banks Could Get $24 Billion In Fees From PPP Loans

share with twitter share with LinkedIn share with facebook
07/07/2020 | 11:23am EDT

By David Benoit and Peter Rudegeair

JPMorgan Chase & Co. and Bank of America Corp. are in line to split between $1.5 billion and $2.6 billion in fees for being the conduits of the government's aid program for small businesses stricken by the coronavirus shutdown, according to an analysis of newly released data.

The nation's two biggest banks by assets delivered more emergency loans than any other lenders that participated in the Paycheck Protection Program and the two are set to earn the biggest fees as well, according to a review of disclosures made Monday by the Treasury Department and Small Business Administration.

In total, the more than 4,000 lending institutions in the analysis are in line to split $14.3 billion to $24.6 billion in processing fees for PPP loans, according to Edwin Hu, at New York University School of Law's Institute for Corporate Governance & Finance, and Colleen Honigsberg of Stanford Law School.

The PPP has delivered more than $520 billion in loans meant to soften the economic blow of the novel coronavirus. The loans can be forgiven if businesses spend the money on certain expenses like rent or payroll, though businesses have said the process is confusing.

It is common for banks to be compensated for facilitating loans made under government programs. What sets PPP apart is its size: The high end of the range of PPP fees lenders can earn exceeds the total size of the SBA's flagship lending program in the 12 months ended Sept. 30.

Banks have said they don't expect sizable profits for the program. Getting their systems up-and-running quickly required diverting thousands of workers to help with applications and building new software to manage the process.

In addition to the program's fees, banks are also set to earn 1% in interest on PPP loans they hold that aren't forgiven, not much more than their cost of funds. The SBA guarantees the loans, protecting banks against defaults.

Big banks including JPMorgan, Bank of America and Wells Fargo & Co. have said they would donate whatever profits they make on PPP.

"We will use the net proceeds of fees...to support small businesses and the communities and nonprofits we serve," a Bank of America spokesman said.

The fees banks earn depend on the size of the loans they make: 5% for loans less than $350,000; 3% for loans between $350,000 and $2 million; and 1% for loans north of $2 million.

If the SBA later determines a borrower was ineligible for a PPP loan, it can claw back the processing fee from the lender.

More than 30 banks, mostly smaller ones, could earn as much from the PPP loans as they reported in net revenue for all of 2019, according to a separate analysis from S&P Global Market Intelligence.

The government released exact loan sizes only for loans of less than $150,000. The remaining loans were placed within several buckets. Ms. Honigsberg and Mr. Hu tallied the exact fees for those loans under $150,000 and the potential range for every other loan.

JPMorgan customers received $29 billion in PPP loans and the bank stands to get between $800 million and $1.38 billion in fees, according to the analysis. Bank of America customers received $25 billion in loans, and the bank is in line for $770 million to $1.21 billion in fees.

Write to David Benoit at david.benoit@wsj.com and Peter Rudegeair at Peter.Rudegeair@wsj.com

 

Stocks mentioned in the article
ChangeLast1st jan.
BANK OF AMERICA CORPORATION 0.32% 25.47 Delayed Quote.-27.91%
JPMORGAN CHASE & CO. 0.03% 97.24 Delayed Quote.-30.27%
WELLS FARGO & COMPANY -0.25% 24.24 Delayed Quote.-54.65%
share with twitter share with LinkedIn share with facebook
Latest news on JPMORGAN CHASE & CO.
05:17pOil settles below 5-month highs amid fuel demand worries
RE
03:09pOil settles below five-month highs amid fuel demand worries
RE
08/05WARREN BUFFETT : Buffett's Berkshire bought $2.07 billion BofA stock since mid-J..
RE
08/05Lapse in Extra Unemployment Benefits to Hurt U.S. Recovery, Economists Say
DJ
08/04INDIA APP SHARECHAT IN TALKS WITH SE : sources
RE
08/04Société Générale Retreats From Risky Investments -- WSJ
DJ
08/03JPMORGAN CHASE : Files Form 10-Q for the Quarter Ended June 30, 2020
BU
08/03Société Générale Retreats From Risky Structured Products
DJ
08/02Men's Wearhouse Parent Files for Bankruptcy -- Update
DJ
07/31Virus Surge Could Restrain Consumer Spending -- and Recovery--2nd Update
DJ
More news
Financials (USD)
Sales 2020 116 B - -
Net income 2020 17 461 M - -
Net Debt 2020 - - -
P/E ratio 2020 17,1x
Yield 2020 3,71%
Capitalization 296 B 296 B -
Capi. / Sales 2020 2,56x
Capi. / Sales 2021 2,64x
Nbr of Employees 256 710
Free-Float 73,6%
Chart JPMORGAN CHASE & CO.
Duration : Period :
JPMorgan Chase & Co. Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends JPMORGAN CHASE & CO.
Short TermMid-TermLong Term
TrendsBullishNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 28
Average target price 114,05 $
Last Close Price 97,24 $
Spread / Highest target 48,1%
Spread / Average Target 17,3%
Spread / Lowest Target -17,7%
EPS Revisions
Managers
NameTitle
James Dimon Chairman & Chief Executive Officer
Gordon A. Smith Co-President & Co-Chief Operating Officer
Daniel E. Pinto Co-President & Co-Chief Operating Officer
Jennifer A. Piepszak Chief Financial Officer
Lori A. Beer Chief Information Officer
Sector and Competitors