JPMorgan Chase & Co (NYSE:JPM) has reported a 35% increase in net income, as the largest US bank by assets continues to benefit from higher interest rates and lower-than-normal loan losses.
In the third quarter, the bank reported a 22% jump in revenue to $40.69 billion from $33.49 billion the year before while net income, including a $1.1 billion contribution from First Republic, climbed 35% to $13.15 billion from $9.78 billion before.
Earnings per share rose to $4.33 from $3.12 while the return on equity improved to 18% from 15%. Its CET1 capital ratio was 14.3% while the provision for credit losses was $1.4 billion, reflecting net charge-offs of $1.5 billion and a net reserve release of $113 million.
The concensus forecast was for revenue of $39.64 billion and earnings of $3.87 per share.
Chief executive Jamie Dimon said that the earnings were “solid” but acknowledged that “these results benefit from our over-earning on both net interest income and below normal credit costs, both of which will normalise over time”.
Net interest income (NII) totalled $22.9 billion, up 30%, while NII excluding markets was $23.2 billion, up 37%, driven by higher rates and higher revolving balances in card services, partially offset by lower deposit balances.
Non-interest revenue was $17.8 billion, up 12%, driven by higher CIB Markets non-interest revenue, higher asset management fees and lower net investment securities losses in corporate, partially offset by an impairment of an equity investment in payments.
Non-interest expense was $21.8 billion, up 13%, driven by higher compensation.
Banking & Wealth Management net revenue was $11.3 billion, up 43%, Investment Banking revenue was $1.6 billion, down 6% and Markets & Securities Services revenue was $7.7 billion, down 2%.
Dimon was also wary of economic prospects.
“Currently, U.S. consumers and businesses generally remain healthy, although, consumers are spending down their excess cash buffers. However, persistently tight labor markets as well as extremely high government debt levels with the largest peacetime fiscal deficits ever are increasing the risks that inflation remains elevated and that interest rates rise further from here.”
He also highlighted events in Ukraine and Israel and said “this may be the most dangerous time the world has seen in decades.”