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Oct 12, 7:23 AM EDT

JP Morgan 3Q profits rise, helped by consumer banking


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AP Photo/Mark Lennihan

NEW YORK (AP) -- JPMorgan Chase & Co. third-quarter profits rose 7 percent from a year earlier, as the bank as able to increase revenue in its consumer banking business even though the company had to set aside additional funds to cover bad loans, most notably in its credit card division.

The biggest bank by deposits and assets said Thursday that it earned a profit of $6.73 billion, or $1.76 per share, compared with $6.29 billion, or $1.58 a share, in the same period a year earlier. The results beat analysts' expectations, who were looking for JPMorgan to earn $1.65 a share, according to FactSet.

JPMorgan's consumer bank was the driver of this quarter's growth, reporting a 16 percent rise in net income. The bank saw higher deposit growth and higher revenue in its credit card division, which the bank has been expanding aggressively in the last year with a new high-end credit card known as Chase Sapphire Reserve. Charge-offs in that business have been creeping steadily higher for several quarters, however, and the bank had to set aside an additional $300 million to cover potential losses.

Despite the creep up in delinquencies, "the U.S. consumer remains healthy," JPMorgan Chase CEO Jamie Dimon said in a statement.

The gains in JPMorgan's consumer banking division were more than enough to make up for declines corporate and investment banking, its other major business. That division reported a 13 percent decline in profits from a year earlier, mostly due to lower trading revenues. Bond trading revenue was down 27 percent and stock trading revenue fell 4 percent, the bank said.

Revenue across the bank was $26.2 billion on a managed basis, which was more than the $25.19 billion that analysts had been looking for.

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