Third-quarter earnings were high at JPMorgan Chase & Co, greatly beyond the markets’ estimated profit and revenue for the company. High third-quarter earnings were reported by JPMorgan Chase & Co, much higher than the markets’ estimated profit and revenue for the company. Earnings totaled $4.37 a share, compared with an estimate of $4.01 from LSEG. The interest income was better than expected, where it picked up the most. Revenue totaled $43.32 billion, beating the estimated $41.63 billion.
Revenue at JPMorgan increased 6%, largely by support from net interest income, a rise of 3% to $23.5 billion, a point that the estimate showed $22.73 billion. This was because of securities investments’ growth and an uptick in the credit card segment. Profit declined by 2% year over year to $12.9 billion.
Jamie Dimon, the CEO, welcomed the results in the quarterly statements but raised concerns about the regulatory pressure on banks to increase their capital base, in addition to geopolitical tensions. “We believe the rules can be written to help foster a healthy financial system without improperly impacting the economy,” he said, and signaled an appeal to reassess the rules in place to have more clarity on how those rules are actually impacting growth and markets.
The investment banking fees from the bank were also reassuringly upbeat, shooting 31% up to $2.27 billion. That was way above the expected $2.02 billion. The fixed income trading revenue was steady at $4.5 billion, which is above an estimate of $4.38 billion. Equities trading business also surged a whopping 27% to $2.6 billion.
JPMorgan increased its full-year guidance for net interest income to around $92.5 billion, from the estimate provided two months ago of about $91 billion. Annual expense is seen reaching around $91.5 billion, down from a prior estimate of around $92 billion.
Meanwhile, shares of JPMorgan surged 5% during the midday session. However, the bank booked its provision for credit losses at $3.1 billion during the quarter, more than the $2.91 billion that analysts had estimated. Charge-offs came in at $2.1 billion, while the company set aside more funds, $1 billion, for future losses. The increase in reserves was merely a way to respond to the uptick in credit card loans rather than any indication of weakness by consumers, said CFO Jeremy Barnum.
As JPMorgan continues to thrive in this rising interest rate environment, analysts will be watching how the bank thinks about potential rate cuts from the Federal Reserve. Margins are likely to be pressured as loan yields come down, but Barnum did admit to third-quarter NII outperformance being a one-quarter blip rather than anything sustainable.
The share of JPMorgan increased by about 25 percent in the year-to-date while rising ahead of the KBW Bank Index that has gained about 20 percent. More results are expected from quarterly results of Wells Fargo, Bank of America, Goldman Sachs, Citigroup, and Morgan Stanley later on.
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