JP Morgan profits rise despite trading downturn
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Version 0 of 1. Another quarterly drop-off in trading didn’t keep JP Morgan from posting higher revenue and a fatter profit. The biggest US bank showed once again on Thursday that it can weather a downturn in fixed-income trading by generating growth elsewhere. An increase in corporate loans, the highest lending margin in 4 ½ years and record profit in asset management helped the lender top analysts’ estimates. JPMorgan’s third-quarter results, which kicked off the industry’s earnings season, show that while calm and rising markets have given clients little reason to trade, the firm’s core lending and advisory businesses performed well, aided by three Federal Reserve rate increases in the past year. Revenue at the commercial bank surged to a record, and the retail bank posted higher profit than the firm’s investment bank for the first time in more than a year. Trading revenue tumbled 21 per cent, steeper than the 20 per cent forecast last month by chief executive Jamie Dimon. Revenue from fixed-income trading slumped 27 per cent, in line with analysts’ predictions. Equity-trading revenue slid 3.6 per cent, missing estimates. Financial stocks have soared since President Donald Trump’s surprise election last year, and were the best performers among 11 major S&P 500 industries through the end of the third quarter, fuelled by optimism that higher rates and lower taxes would goose profits. New York-based JPMorgan helped pace the advance, surging 42 per cent in that span. Net income rose 7.1 per cent to $6.73bn (£5.1bn), or $1.76 a share, from $6.29bn, or $1.58 a year earlier. Adjusted earnings per share were $1.75, beating the $1.65 average estimate of 21 analysts surveyed by Bloomberg. Total revenue rose 2.7 per cent to $26.2bn, topping the $25.6bn estimate. Bloomberg |