JPMorgan Chase (NYSE:JPM) on Friday posted results that topped analysts’ estimates as the biggest U.S. bank by assets took advantage of rising rates to generate more interest income.
Earnings came in at $3.12 a share, beating the $2.88 estimate of analysts.
Revenue proved $33.49 billion, exceeding the $32.1-billion estimate.
The bank said third-quarter profit fell 17% from a year earlier to $9.74 billion, or $3.12 a share, as the firm added to reserves for bad loans by a net $808 million. Excluding a 24-cent-per-share hit tied to losses on investment securities, the bank posted earnings of $3.36 a share, handily topping analysts’ estimate.
Revenue jumped 10% to $33.49 billion in the quarter, thanks to higher interest rates as the Federal Reserve battles inflation. Net interest income surged 34% to $17.6 billion in the period because of higher rates and an expanding book of loans. That topped analysts’ expectations by more than $600 million.
JPMorgan CEO Jamie Dimon noted that while consumer and businesses were financially robust in the period, the economic picture was darkening.
Early signs of those headwinds began appearing in the quarter. JPMorgan booked $959 million in losses on securities in the quarter, reflecting the broad declines in financial assets in the quarter.
Analysts were concerned about the impact that a slowing economy would have on the bank. If U.S. unemployment levels rise to 6%, the bank would probably have to bolster loan loss reserves by around $5 billion to $6 billion, Dimon said Friday in a conference call.
JPM shares jumped $3.12, or 2.9%, to $112.49.
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