JPMor­gan earn­ings fall 8%, still beat es­ti­mates

Kuwait Times - - BUSINESS -

JPMor­gan Chase’s third-quar­ter prof­its fell 8 per­cent from a year ear­lier, the bank said yes­ter­day, as higher rev­enue in re­tail and in­vest­ment bank­ing was off­set as the bank had to put aside more money to cover loans that might go bad. The re­sults still beat Wall Street’s ex­pec­ta­tions, how­ever, and JPMor­gan Chase’s stock rose in early pre-mar­ket trad­ing.

The largest US bank by as­sets and rev­enue said it earned $6.29 bil­lion in the quar­ter, or $1.58 per share, down from a profit of $6.80 bil­lion, or $1.68 per share, in the same pe­riod a year ear­lier. The re­sults beat the $1.39 per share an­a­lysts were look­ing for, ac­cord­ing to Fac­tSet. “We de­liv­ered strong re­sults this quar­ter with each of our busi­nesses per­form­ing well,” JPMor­gan’s CEO Jamie Di­mon said in pre­pared re­marks.

As it has been for sev­eral quar­ters now, JPMor­gan re­mained un­der pres­sure from the Fed­eral Re­serve’s de­ci­sion to keep in­ter­est rates at near record low lev­els. Banks are di­rectly im­pacted by low in­ter­est rates be­cause it in­hibits their abil­ity to charge more in in­ter­est when their cus­tomers bor­row. In JPMor­gan’s con­sumer bank, its largest divi­sion by rev­enue, re­ported a 16 per­cent de­cline in net in­come from a year ago to $2.20 bil­lion. JPMor­gan was able to in­crease de­posits sharply in the quar­ter and also orig­i­nated more mort­gages, but it had to set aside more money to cover po­ten­tially bad loans in its credit card and auto di­vi­sions.

The bank also said it had in­creased pro­mo­tional and new credit card ac­count costs in the quar­ter, likely tied to the in­ter­est in the bank’s Chase Sap­phire Re­serve card which de­buted in the quar­ter to un­ex­pect­edly strong de­mand. JPMor­gan’s in­vest­ment bank had a par­tic­u­larly strong quar­ter, with pre­tax profit of $2.91 bil­lion, dou­ble its earn­ings from a year ear­lier. A large driver of the gain was the bank’s bond trad­ing desks, where rev­enue rose 48 per­cent from a year ear­lier, com­pared to the 1 per­cent rise in rev­enue in stock trad­ing.

In­vest­ment bank­ing ad­vi­sory fees, which are earned when JPMor­gan’s bankers help com­pa­nies is­sue debt, merge, ac­quire or is­sue stock, was up 14 per­cent from a year ago. Rev­enue rose to $24.67 bil­lion, com­pared with $22.78 bil­lion in the same pe­riod a year ear­lier. — AP

Newspapers in English

Newspapers from Kuwait

© PressReader. All rights reserved.