JPMorgan Third-Quarter Profit Rises 8% -- Update

By David Benoit 

JPMorgan Chase & Co. said Tuesday that third-quarter profit rose 8% and topped expectations.

The nation's largest bank reported a profit of $9.08 billion, or $2.68 a share. Analysts polled by FactSet had expected earnings of $2.45 a share. A year earlier, the bank reported a profit of $8.38 billion, or $2.34 per share.

Revenue rose 8% to $29.34 billion from $27.26 billion a year ago, above analysts' expectations for $28.47 billion.

The bank has now posted year-over-year profit gains for each of the past seven quarters, boosted by rising interest rates that had increased the profitability on lending operations. But rate expectations reversed this summer as the Federal Reserve moved from increasing its base rate to cutting rates. JPMorgan's interest expense was up 25% from a year ago.

Even so, the bank's net interest income, the amount it makes from lending minus the interest it pays out, rose 2% to $14.23 billion.

JPMorgan shares rallied in September, closing above $120 for the first time in its history. It is up 19% this year, more than the KBW Nasdaq bank index and slightly above the S&P 500. Shares rose 1.8% to $118.66 in premarket trading Tuesday.

Revenue from non-lending operations at the bank jumped 13% to $15.11 billion.

In the bank's consumer unit, revenue rose 7% to $14.26 billion and in the corporate and investment bank it rose 6% to $9.34 billion.

The consumer bank has remained resilient in the face of a potential economic slowdown, and executives have touted the strength of the U.S. consumer compared with big corporate clients. It said deposit balances and consumer lending revenue increased, allowing it to expand margins in the business.

Profit for JPMorgan's consumer bank rose 5% to $4.27 billion as income from mortgage fees surged thanks to refinancing activities. The bank charged off 1.16% of its consumer loans.

In the corporate and investment bank, profit rose 7% to $2.81 billion. Revenue from the banking side, which includes advisory and treasury work, rose 2% while its trading revenue rose 14%. The bank's fixed-income revenue was up 25%, a surge it said came despite deteriorating markets, as it seeks to take market share in that business.

JPMorgan's two smaller business lines both slipped in the quarter. The commercial bank earned $937 million, down 14%, while its asset management operations earned $668 million, down 8%

Return on equity, a key measure of profitability, was 15% in the third quarter, compared with 14% a year ago. Total expenses rose 5% to $16.42 billion

Write to David Benoit at [e-mail]

(END) Dow Jones Newswires

October 15, 2019 07:50 ET (11:50 GMT)

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