JPMorgan Chase’s (NYSE:JPM) Q2 earnings underscored a nascent rebound in investment banking activity. During the bank’s Q2 earnings call, Chief Financial Officer Jeremy Barnum conveyed an optimistic outlook on the sector. Investment banking fees jumped 50% Y/Y in Q2 2024, although from a low base, Chairman and CEO Jamie Dimon highlighted in the company’s press release.

“The dialogue on ECM [equity capital markets] is elevated and the dialogue on M&A is quite robust as well — so all of those are good things that encourage us and make us hopeful that we could be seeing sort of a better trend in this space,” he said.

The initial public offerings market, though, is still muted. While overall equity indices are improving, “it’s not as good as you would otherwise expect,” Barnum said, specifically noting that much of the equity index gains are traced to a few mega-cap stocks.

In addition, private companies have raised a lot of private capital at “pretty high valuations,” he noted. “And so in some cases, people looking at IPOs could be looking at down rounds. That’s an issue.”

On the debt capital markets, JPMorgan (JPM) is still cautious about the second half of the year as it expects the first half experienced some “pull-forward”, in other words, clients accelerated some plans to issue debt.

Barnum also discussed the company’s philosophy on stock buybacks. During Q2, the company bought back $4.9B of its common stock. “Jamie talked about as we liquidate the Visa, deploying those proceeds into JPM, and that’s what we did this quarter,” he said.

During the quarter, JPMorgan Chase (JPM) realized a $7.9B net gain from the sale of Visa (V) shares.

He declined to provide guidance on repurchasing stock. “We don’t want to get into the business of guiding on buybacks,” Barnum said.

The company’s capital hierarchy consists of first, growing the business organically and inorganically; a sustainable dividend; and finally buybacks, he said. “But that hierarchy does not commit us to return 100% of the capital generation in any given quarter,” he added.

JPMorgan (JPM) shares slipped 0.6% in early afternoon trading on Friday, after its earnings and revenue rose with rebounding investment banking and markets revenue, even as its provision for credit losses increased.