JPMorgan Chase (NYSE:JPM) has revealed a forecast for annual net interest income (NII) that surpasses analyst estimates, while higher interest rates contributed to record profits in 2023. The bank expects NII to be around $90 billion in the fiscal year 2024, exceeding Bloomberg consensus estimates of $86.08 billion. NII in 2023 was reported at $97 billion.

JPMorgan anticipates that loan growth, particularly in credit card revolving balances, and modest deposit outflows will partially offset the impact of six projected Federal Reserve interest rate cuts in 2024. Jamie Dimon, the Chairman of JPMorgan, characterized the U.S. economy as “resilient” but highlighted concerns about the reliance on government deficit spending, leading to potential stickier inflation and higher interest rates than market expectations.

Shares of JPMorgan rose by around 2% in premarket U.S. trading following the announcement. Despite the surge in net income to $49.6 billion, a 32% increase over the previous year and an all-time high, adjusted net revenue for the fourth quarter fell slightly below expectations at $39.94 billion, compared to the expected $40.23 billion. The bank reported provisions for credit losses of $2.76 billion, reflecting concerns about potential customer defaults in a period of elevated interest rates. Noninterest expenses increased to $3.6 billion, primarily driven by a $2.9 billion payment into a Federal Deposit Insurance Corp fund.

Analysts at HSBC noted that JPMorgan is likely to continue posting best-in-class profitability but highlighted elevated expectations and a premium valuation as potential constraints on upside potential.