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Oct 14, 8:18 AM EDT

JPMorgan's 3Q earnings fall 8 percent, still beat estimates

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AP Photo/Mark Lennihan

NEW YORK (AP) -- JPMorgan Chase's third-quarter profits fell 8 percent from a year earlier, the bank said Friday, as higher revenue in retail and investment banking was offset as the bank had to put aside more money to cover loans that might go bad.

The results still beat Wall Street's expectations, however, and JPMorgan Chase's stock rose in early pre-market trading.

The largest U.S. bank by assets and revenue said it earned $6.29 billion in the quarter, or $1.58 per share, down from a profit of $6.80 billion, or $1.68 per share, in the same period a year earlier. The results beat the $1.39 per share analysts were looking for, according to FactSet.

"We delivered strong results this quarter with each of our businesses performing well," JPMorgan's CEO Jamie Dimon said in prepared remarks.

As it has been for several quarters now, JPMorgan remained under pressure from the Federal Reserve's decision to keep interest rates at near record low levels. Banks are directly impacted by low interest rates because it inhibits their ability to charge more in interest when their customers borrow.

In JPMorgan's consumer bank, its largest division by revenue, reported a 16 percent decline in net income from a year ago to $2.20 billion.

JPMorgan was able to increase deposits sharply in the quarter and also originated more mortgages, but it had to set aside more money to cover potentially bad loans in its credit card and auto divisions. The bank also said it had increased promotional and new credit card account costs in the quarter, likely tied to the interest in the bank's Chase Sapphire Reserve card which debuted in the quarter to unexpectedly strong demand.

JPMorgan's investment bank had a particularly strong quarter, with pre-tax profit of $2.91 billion, double its earnings from a year earlier. A large driver of the gain was the bank's bond trading desks, where revenue rose 48 percent from a year earlier, compared to the 1 percent rise in revenue in stock trading.

Investment banking advisory fees, which are earned when JPMorgan's bankers help companies issue debt, merge, acquire or issue stock, was up 14 percent from a year ago.

Revenue rose to $24.67 billion, compared with $22.78 billion in the same period a year earlier.

JPMorgan's stock rose 1.4 percent in pre-market trading.


Ken Sweet covers banks and consumer financial issues for The Associated Press. Follow him on Twitter at @kensweet.

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