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• JPMorgan Chase exceeded third-quarter expectations for both profit and revenue..
• JPMorgan reported a drop in their profit, compared to last year, but its revenue increased.
• JPMorgan has done well with higher interest rates, making record profits since the Federal Reserve started raising rates in 2022.

JPMorgan Chase exceeded third-quarter expectations for both profit and revenue, which fuels optimism among investors.

What report says:

Earnings:	$4.37 a share	$4.01 share LSEG estimate
Revenue:	$43.32 billion	$41.63 billion estimate

JPMorgan reported a 2% drop in profit from last year, bringing it to $12.9 billion, while revenue grew by 6% to $43.32 billion. If we talk about the bank’s net interest income, it has increased by 3% to $23.5 billion, surpassing the expected $22.73 billion.

 It only became possible because of the gains from investments and growth in its credit card loan business.

Jamie Dimon, CEO of the company highlighted the company’s strong quarterly results but also spoke about the challenges banks face with new regulations requiring them to hold more capital. 

He also expressed concern over growing global risks, calling out the current situation as dangerous and worsening.

Jaime Dimon speaks during the New York Times annual DealBook summit on November 29, 2023 in New York City. “The bank believes that regulations can support a strong financial system without hurting the economy.” 

He suggested it’s a good time to review the current rules, which were created for a reason, to better understand their effect on economic growth and market stability.

The bank’s performance was boosted by its Wall Street division. Investment banking fees went up 31% to $2.27 billion, higher than the expected $2.02 billion.

Fixed income trading earned $4.5 billion, the same as last year but more than the $4.38 billion estimate. Equities trading increased by 27% to $2.6 billion, beating the $2.41 billion estimate.

The company increased its 2024 forecast for net interest income to around $92.5 billion, up from the previous $91 billion estimate. It also lowered its expected yearly expenses to $91.5 billion, down from the earlier $92 billion estimate.Shares went up 5% during midday trading.

JPMorgan set aside $3.1 billion for potential credit losses, higher than the expected $2.91 billion. This includes $2.1 billion in bad debt write-offs and $1 billion added to reserves for future losses.

Jeremy Barnum, CFO said that “consumers are ‘doing well and in a strong position,’ and the added reserves are due to the bank’s growth in credit card loans, not because consumers are struggling”.

There are concerns about JPMorgan how it will adjust because of the cutting rates of the Federal Reserve. Like other major banks, it may face tighter profit margins as interest rates on loans drop faster than its costs for funding.

 Barnum confirmed that, last month the bank expects net interest income to decrease before rising again in the future. JPMorgan lowered its expectations for net interest income and expenses in 2025. On Friday

The increase in net interest income for the third quarter was ‘a bit of a blip,’ caused by ‘overlapping trends that resulted in an increase,’ but it is not a trend that will continue, he said.

Before Friday, JPMorgan’s shares had risen about 25% this year, outpacing the KBW Bank Index, which gained 20%.