JPMorgan Profits Rise 24% Despite Trading Dip

Irving Hamilton
October 13, 2018

Bond trading revenue fell 10 percent - in sharp contrast to Citigroup's 9 percent increase - while equity trading revenue was up 17 percent.

The bank is the largest in the U.S. by assets and its results are often seen as a barometer of the economy.

Chief Executive Jamie Dimon praised President Donald Trump's tax cuts and deregulatory efforts, but cautioned on inflation and "geopolitical issues bursting all over the place".

JPMorgan's core-loan book expanded 6 per cent, excluding the investment bank, even as it faced stiffer competition from non-traditional lenders and as rising interest rates sapped demand for some types of borrowing, including mortgages.

It has benefited from a tax windfall and a strong economy that has led to higher interest rates and kept loan defaults in check.

Total loans at the fourth largest U.S. bank by assets fell 1 percent to $942.3 billion, while net interest margin, a measure of how much a bank earns on its investments, rose to 2.94 percent from 2.86 percent in the year-ago quarter.

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Shares rose about 1% in morning trading after the results were announced.

The bank's net interest income beat a previous record of US$13.8 billion set in the fourth quarter of 2008.

JPMorgan's shares rose about 1 percent in early trading. Analysts had expected about $15.7 billion of expenses in the quarter. Analysts polled by Bloomberg had expected earnings of $2.26 per share. JPMorgan said Friday the drop in fixed-income trading revenue reflected weakness in its rates and credit-trading businesses.

Total revenue rose 0.4 percent to $22 billion, with only community banking - the area most closely tied to the 2016 sales scandal - showing growth in revenue.

Shares of the bank were trading at US$109.15 before the start of regular USA trading, after closing at US$108.13 on Thursday.

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