3 trends emerge for customers from J.P. Morgan report
Anyone with an ATM card, checking account or interestbearing CD was listening for something positive when JPMorgan Chase, the No. 1 U.S. bank by deposits, announced earnings.
For the most part, account holders probably liked what the bank’s chief financial officer, Marianne Lake, had to say Thursday.
The bank made $6.7 billion in the third quarter, which topped Wall Street expectations. The main storyline was upbeat: People on Main Street are doing well and are still filling out applications for mortgages and using their credit cards responsibly.
But the things Lake told Wall Street analysts in a conference call were the real money quotes:
Cyber theft fears fail to materialize: The high-profile hack at credit-reporting firm Equifax didn’t, um, break the bank. Fears of cyber thieves using data to file for loans using stolen personal data didn’t materialize in any measurable way — at least not yet. In fact, Lake said, “As a practical matter we are not seeing a significant increase in fraud.” Nor, she said, did the cyber theft of personal data of more than 145 million Americans from Equifax hurt its loan business, saying, “We saw no measurable impact.”
Get used to puny interest: There have been three shortterm interest rate hikes from the Federal Reserve since December, boosting the Fed’s key rate to a range of 1% to 1.25%. Even so, Lake said customers shouldn’t expect interest paid on passbook savings, checking accounts or CDs to rise much. There has been “very little or any movement in repricing of consumer accounts,” she said. But that could change if the Fed, as it has signaled to markets, hikes rates again in December and three or four more times next year. The national average interest paid on savings accounts is a skimpy 0.09%, according to BankRate.com.
Healthy state of consumers: CEO Jamie Dimon said in the bank’s earnings report the U.S. consumer “remains healthy, thanks to solid wage growth.” Lake backed up her boss’ claim, noting strength in the home-loan business: “Our consumer mortgage business remains strong and is performing well.”