JP Morgan on Wednesday posted third-quarter results that exceeded expectations on a $1.5 billion boost from better-than-expected loan losses. The gain came after the bank released $2.1 billion in reserves and had $524 million of net chargeoffs in the quarter, New York-based JPMorgan said in a release. The bank produced $3.74 per share in earnings, which includes a 19 cent per share tax benefit from the company’s 2020 filing.
Here are the numbers:
- Earnings: $3.74 per share vs. $3 per share estimate of analysts surveyed by Refinitiv.
- Revenue: $30.44 billion vs $29.8 billion estimate.
“We released credit reserves of $2.1 billion as the economic outlook continues to improve and our scenarios have improved accordingly,” CEO Jamie Dimon said in the release. The firm “delivered strong results as the economy continues to show good growth - despite the dampening effect of the Delta variant and supply chain disruptions.”
For most of the pandemic, booming trading revenue across Wall Street has benefited JPMorgan’s investment bank. But that was expected to moderate in the third quarter. Last month, JPMorgan executive Marianne Lake said that trading revenue will be 10% lower than a year ago, which was an unusually strong quarter.
Fixed-income revenue dropped 20% to $3.67 billion, below the $3.73 billion StreetAccount estimate. But equities trading revenue helped make up the shortfall, producing $2.6 billion, beating the $2.16 billion estimate.
But a robust level of mergers and IPO issuance helped the firm’s investment bank. The firm posted a 50% increase in investment banking fees to $3.28 billion, exceeding the StreetAccount estimate by half a billion dollars.
Dimon will likely be asked about the bank’s acquisition strategy after a string of recent deals. Last month, the bank acquired restaurant review service the Infatuation and college-planning platform Frank. That followed three acquisitions of fintech start-ups in the past year.
IMAGE SOURCE: PIXABAY