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JPMorgan profit and revenue beat estimates … MARKETWATCH October 12, 2018 at 01:04PM

JPMorgan profit and revenue beat estimates … MARKETWATCH

 

JPMorgan profit and revenue beat estimates

By Peter Rudegeair

JPMorgan Chase & Co. said Friday that third-quarter profit rose as the bank’s consumer business helped it overcome weaker trading.

Shares rose 2% in premarket trading after the results were announced.

The bank reported a profit of $8.38 billion, or $2.34 a share.

Analysts polled by Refinitiv had expected earnings of $2.25 a share.

JPMorgan’s trading revenues decreased 2% to $4.4 billion from $4.5 billion a year earlier.

At a September conference, Chief Financial Officer Marianne Lake said trading revenues in the third quarter are likely to fall mid-single digits from the year earlier period, due in part to the impact of the corporate
tax overhaul on some of its trading businesses.

The boost from still low — but rising — interest rates will likely be a major focus for investors. Though an increase in rates can help the profitability of big consumer lenders like JPMorgan, they can also
drag down mortgage banking revenue and force banks to pay more to depositors.

Last week, Federal Reserve Chairman Jerome Powell said the U.S. economy is “a long way” from neutral. Another rate hike is viewed as likely for 2018 but beyond that is less clear.

Costs increased 7% to $15.62 billion from $14.57 billion a year earlier. Ms. Lake said in September that the bank’s 2018 expenses likely will be closer to $63.5 billion, up from $63 billion that was shared at
its annual investor day presentation in February. The rise is largely revenue related, such as transaction cost and brokerage clearing in addition to performance incentives, she then said.

Return on equity, a key measure of profitability, was 14% in the third quarter compared with 11% a year ago.

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