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Business News/ Companies / Company Results/  JPMorgan Q3 Results: Net profit rises 35% to $13.15 billion on higher interest income

JPMorgan Q3 Results: Net profit rises 35% to $13.15 billion on higher interest income

The bank reported a profit of $13.15 billion, up from $9.74 billion in the same period a year earlier. On a per-share basis, profit rose to $4.33 a share from $3.12 a share a year earlier.

FILE PHOTO: A view of the exterior of the JP Morgan Chase & Co. corporate headquarters in New York City. (REUTERS)Premium
FILE PHOTO: A view of the exterior of the JP Morgan Chase & Co. corporate headquarters in New York City. (REUTERS)

JPMorgan Chase's net profit rose in the third quarter  as higher interest rates boosted its income from loans, the bank announced on Friday, October 13. The lender, the biggest US bank in terms of assets, reported third-quarter profits of $13.2 billion, up 35 per cent from the year-ago period behind the lift from higher interest rates on earnings.

The bank's revenue rose 22 per cent to $39.9 billion. Besides the boost from interest rates -- reflecting the gap between the lending rate it charges clients compared with interest payments to customers -- JPMorgan also cited good credit quality as a driver.

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The rise in revenues was largely driven by higher interest rates, which has allowed JPMorgan to charge customers significantly higher amounts of interest on loans compared to a year ago. 

The bank's net interested income (NII) was $22.9 billion in the three months through September 30, above analysts’ expectations. The biggest US bank said it now expects to generate $88.5 billion from the revenue source this year.

The bank's Chief Executive Officer (CEO) Jamie Dimon said the bank expects both exceptionally high net interest income and low loan defaults to ‘normalize’ over time.  The positive elements helped JPMorgan offset some areas of weakness such as corporate and investment banking, where overall revenues dipped two percent. 

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JPMorgan said the results excluded the impact of its purchase of First Republic. “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," said the CEO.

Dimon laid out a list of major issues: the Russia-Ukraine War, the new war between Israel and the Palestinians in Gaza, high levels of government debt and deficits, high inflation, as well as the tight labor market, where worker demands for increased wages has led to high-profile strikes in manufacturing and entertainment.

"The war in Ukraine compounded by last week's attacks on Israel may have far-reaching impacts on energy and food markets, global trade, and geopolitical relationships,'' he said. “This may be the most dangerous time the world has seen in decades," Dimon wrote in the bank's earnings statement.


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Published: 13 Oct 2023, 04:30 PM IST
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