JPMorgan Chase on Friday topped analysts’ estimates for third-quarter profit and revenue as the bank generated more interest income than expected, while credit costs were lower than anticipated.
Here’s what the company reported:
- Earnings: $4.33 a share
- Revenue: $40.69 billion, vs. $39.63 billion LSEG estimate
The bank said profit surged 35% to $13.15 billion, or $4.33 a share, from a year earlier. That per-share figure includes 17 cents in securities losses and 22 cents in legal expenses. It wasn’t immediately clear which items were included in LSEG’s $3.96 a share profit estimate.
Revenue climbed 21% to $40.69 billion, helped by the stronger-than-expected net interest income. That measure surged 30% to $22.9 billion, exceeding analysts’ expectations by roughly $600 million. At the same time, credit provisioning of $1.38 billion came in far lower than the $2.39 billion estimate.
JPMorgan’s retail banking division saw profit surge 36% to $5.9 billion, fueled by higher net interest income and the acquisition of First Republic. Its corporate and investment bank saw profit slip 12% to $3.1 billion on declines in trading and advisory revenue.
JPMorgan shares climbed 3.2% in morning trading, moderating earlier gains of nearly 5%.
JPMorgan shares have outperformed a regional bank ETF this year.
Uncertain times
Increased guidance
While smaller competitors have seen net interest income damaged by higher rates this year, JPMorgan continued to benefit from the rate environment.
The bank said Friday it now expects that net interest income will total $88.5 billion this year, up from guidance of $87 billion given in July. It was the fourth time the bank increased its guidance this year.
During a conference call with analysts, Dimon and CFO Jeremy Barnum criticized U.S. regulators’ push to increase capital levels at banks with at least $100 billion in assets. Unless modified, the plan would boost JPMorgan’s required capital by 25%, or $50 billion, according to the bank.
“A capital increase of this magnitude is disconcerting and there’s a lot that does not make sense to us,” Barnum said, adding that regulators have repeatedly said U.S. banks were already well capitalized.
Shares of JPMorgan have climbed 8.7% this year through Thursday, far outperforming the 19% decline of the KBW Bank Index.
Wells Fargo and Citigroup posted results on Friday that topped expectations for revenue. Bank of America and Goldman Sachs report Tuesday, and Morgan Stanley discloses results on Wednesday.
