JPMorgan 3Q earnings increased 24 percent, helped by lower taxes
JPMorgan 3Q earnings increased 24 percent, helped by lower taxes
JPMorgan Chase & Co. said on Friday that its third-quarter earnings rose 24 percent from a year earlier, helped by a lower tax bill and higher interest rates, which allowed it to charge more for loans consumers and companies alike. That was enough to compensate for a less than stellar quarter in its commercial business.
The New York-based bank said it made $ 838 billion in the first quarter, or $ 2.34 per share. That is an increase of $ 6.73 billion, or $ 1.76 per share, in the same period of the previous year. The results surpassed analysts' expectations, which sought JPMorgan to earn $ 2.26 per share, according to FactSet.
"The United States and the global economy continue to show strength, despite growing economic and geopolitical uncertainties, which at some point in the future can have negative effects on the economy," said Jamie Dimon, CEO and president of JPMorgan, in a statement.
Investors will closely monitor the results of JPMorgan and other major banks on Friday. The US stock market UU It is coming off its worst two-day performance since February, and investors want to see evidence that corporate earnings remain solid. Shares of JPMorgan Chase rose slightly in pre-market trading. The stock has risen 1.1 percent this year after falling more than 6 percent during the slowdown in the market this week.
Like many banks, JPMorgan has benefited greatly from the increase in interest rates in recent years. The bank's net interest income increased 9 percent compared to the previous year. Although the bank had to pay more interest to the depositors, it was more than capable of offsetting those higher costs by charging more to the borrowers. The bank's net interest margin, which is the difference between the amount a bank paid depositors for their funds and the amount the bank charged for lending them, was 2.24 percent in the quarter, a rise compared to the 2.19 percent from the previous year.
The bank also continues to benefit greatly from the tax law passed by the Republicans. Its effective tax rate was 21.6 percent in the quarter, compared to 29.6 percent the previous year. While the bank's earnings before income taxes increased by more than a billion dollars, the money it paid in income taxes in the last quarter fell by $ 500 million compared to the previous year.
The other major business of JPMorgan, its corporate and investment bank, had a weaker quarter than the rest of the bank. Revenue from investment banking increased a modest 4 percent compared to the previous year, and trading income was indeed flat. While revenue from stock trading rose 17 percent from a year earlier, revenue from JPMorgan bonds, a much larger part of the bank's business, fell 6 percent.
Throughout the company, JPMorgan's quarterly revenues were $ 27.82 billion, compared to $ 26.45 billion the previous year.
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