JPMorgan Chase Third Quarter Results Stronger Than Expected
JPMorgan Chase (NYSE:JPM) posted third quarter earnings that surpassed analyst estimates. The bank generated a third quarter profit of $6.3 billion, or $1.58 a share, beating analysts’ estimates of $1.39 a share. The bank reported revenue of $25.5 billion for the quarter, topping estimates of $24.3 billion. The results represented an 8 percent year-over-year increase in revenue. In the second quarter, JPMorgan reported adjusted earnings per share of $1.46, beating expectations of $1.43, on revenue of $25.20 billion, higher than the $24.50 billion expected.
Stronger than expected activity at its trading division buoyed JPMorgan’s results. The firm’s overall investment bank saw profits nearly double to $2.9 billion versus the same period last year. At its trading division, revenues rose 21 percent year-over-year to $6.5 billion. Fixed income trading revenue rose 48 percent from the same quarter a year ago. Strength in the U.S. and Asia grew JPMorgan’s equities division revenues 1 percent year-over-year.
The consumer banking division saw double digit growth in deposits and loans. Overall sales in consumer banking rose 4 percent to $11.3 billion for the third quarter. Mortgage banking revenues increased 21 percent year-over-year to $1.9 billion. Card, commerce and automotive revenues fell 1 percent to $4.7 billion. Consumer banking is JPMorgan’s biggest business by revenue.
The bank recorded a record quarter of profits at its commercial banking division. JPMorgan’s commercial bank saw profits surge 50 percent to $778 million and revenue rise 14 percent to $1.9 billion. In the firm’s $1.8 trillion asset management business, loan balances with clients hit new highs. Across the company, core loans rose 15 percent to $779 billion, while deposits rose 8 percent to $1.37 billion.
Revenues in the asset management division rose 5 percent to $3 billion and net income was up 17 percent to $557 million. Assets under management increased 4 percent to $1.8 trillion. Overall profits at the bank fell 8 percent due to rising credit costs. CEO Jamie Dimon said, “We delivered strong results this quarter with each of our businesses performing well.” JPMorgan is currently the largest bank by assets in the U.S.
JPMorgan CFO Marianne Lake said in a conference call with the media that the bank is reviewing practices at its branches nationwide after revelations that Wells Fargo branch employees created millions of fake customer accounts to boost their cross-selling ratios.
Lake reported the bank has found some cross-selling issues, but “we are not seeing anything that is rising to a level of concern.”
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