JPMorgan Chase reported better than expected third-quarter profits of $12.9bn, even as the bank prepared for higher loan losses from more indebted borrowers.
The largest US bank’s net income exceeded the $12.1bn expected by analysts but represented a 2 per cent fall on the same quarter in 2023.
Results beat expectations across the bank’s activities, including its lending business and investment banking and trading divisions.
JPMorgan’s shares were up about 1 per cent in pre-market trading in New York.
The bank also reported better than expected net interest income (NII) — the difference between what it pays on deposits and what it earns from loans and other assets. Third-quarter NII was $23.5bn, up 3 per cent from a year earlier.
After driving profits for much of the past two years, NII is expected to come under pressure from falling US interest rates.
JPMorgan lifted its guidance for NII in 2024 to about $92.5bn, up from $91bn before.
The bank did not provide an outlook for 2025, despite Daniel Pinto, JPMorgan president, warning last month that analysts were too optimistic about NII for next year.
The bank set aside $3.1bn for potential loan losses, more than double its provisions in the third quarter of last year.
Banks’ losses from lending have been unusually low since 2020 after government stimulus efforts helped boost savings. But as households have run down those savings balances and increased their borrowing, loan losses have been rising.
Investment banking fees at JPMorgan were 31 per cent higher than a year ago at $2.3bn, outstripping analysts’ forecasts.
Wall Street groups have been eagerly anticipating a revival in dealmaking, after interest rate rises starting in 2022 curtailed a pandemic-era boom.
Revenues from equity trading at JPMorgan were up 27 per cent from a year earlier to $2.6bn, while fixed income trading revenues were flat at $4.5bn — both better than analysts’ expectations.
The bank is reporting earnings along with smaller rival Wells Fargo.
Bank of America, Citigroup and Goldman Sachs publish their results on October 15, with Morgan Stanley reporting the following day.
