JPMorgan Chase & Co (NYSE:JPM) has reported a less-than-feared 17% drop in third-quarter profit as a jump in interest income cushioned a blow from higher loan loss provisions and a slump in dealmaking.
For the third quarter, JPMorgan's profit fell to $9.74 billion, or $3.12 per share, while revenue rose by 10% to $32.72 billion, helped by a 22% increase in revenue from fixed-income trading.
The firm - the largest US bank - reported adjusted profit of $3.36 per share, well above analysts' average estimate of $2.88, according to Refinitiv data, Reuters said.
READ: Fears of recession prompt US banks to increase bad debt provisions
JPMorgan's net interest income excluding markets rose 51% to $16.9 billion in the quarter, driven by higher rates. For the fourth quarter, the bank said it expects the metric to rise to about $19 billion.
In a statement, JPMorgan chief executive Jamie Dimon noted that American consumers continue to spend and businesses remain healthy. However, he added, there were "significant headwinds immediately in front of us", noting stubbornly high inflation leading to higher global interest rates, the uncertain impacts of quantitative tightening, the war in Ukraine and the fragile state of oil supply and prices.
The bank set aside $808 million in reserves in the third quarter, as the Federal Reserve's interest rate hikes stoke fears of an economic downturn. In the same quarter last year, the bank had released $2.1 billion of reserves.
Revenue from investment banking, one of the bank's biggest businesses, slumped by 43% to $1.7 billion as a mix of high inflation and fears of looming recession forced buyers and sellers to pause deals.
JPMorgan shares rose 1,8% in pre-market New York trading after the results, having fallen by 31% so far this year.
Fellow US lenders, Citibank, Morgan Stanley and Wells Fargo have all also released third-quarter numbers this morning.
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