J.P. Morgan Chase (NYSE:JPM) on Tuesday posted profit and record revenue that exceeded expectations on the strength of consumer banking operations that helped the bank mitigate the impact of lower interest rates.
The bank, one of the mainstays of the U.S. economy, said third-quarter profit rose 8% to $9.1 billion, or $2.68 a share, exceeding the $2.45 estimate of analysts. Revenue also rose 8% to a record $30.1 billion, exceeding the $28.5 billion estimate. The bank cited growth in home loans, auto and credit cards.
Said CEO Jamie Dimon in the Tuesday morning news release, "The consumer remains healthy with growth in wages and spending, combined with strong balance sheets and low unemployment levels.
"This is being offset by weakening business sentiment and capital expenditures mostly driven by increasingly complex geopolitical risks, including tensions in global trade."
Banks have fallen behind the main stock indexes this year on worries the Federal Reserve’s easing of rates would squeeze the industry’s profit margins.
The Fed cut rates twice in the third quarter, in the hopes of averting a slowdown, and banks, including Morgan and Wells Fargo (NYSE:WFC) warned last month that net interest income would be lower than earlier guidance.
Still, the bank posted $14.4 billion in third-quarter net interest income, exceeding Morgan Stanley estimates almost $300 million, as J.P. Morgan grew its balance sheet.
Analysts will scrutinize the bank’s charge-offs for any signs of weakness in consumer and corporate borrowing.
Shares opened Tuesday ahead $1.84, or 1.6%, to $118.29
