JPMorgan profit boosted by higher interest rates

REUTERS: JPMorgan Chase & Co reported higher-than-expected quarterly profit on Friday as gains from higher interest rates and a growth in loans helped the bank offset weakness in bond trading revenue.

The largest U.S. bank by assets, whose results are often seen as a barometer of the economy, has benefited from a tax windfall and a strong economy that has led to higher interest rates and kept loan defaults in check.

FILE PHOTO: A sign of JP Morgan Chase Bank is seen in front of their headquarters tower in New York

Average core loans was up 6 percent in the third quarter even as higher rates crimped borrowing in areas such as mortgage loans.

Markets and investor services revenue, which includes revenue from trading bonds and stocks, was up just 1 percent, as financial markets were hit by escalating trade war between Beijing and Washington and worries about slowing global growth.

"The U.S. and the global economy continue to show strength, despite increasing economic and geopolitical uncertainties, which at some point in the future may have negative effects on the economy," Chief Executive Officer Jamie Dimon said.

Overall, JPMorgan’s total revenue increased 5.2 percent to US$27.82 billion, as the lender’s diverse business mix helped it weather the ups and downs of the trading business. All four of its four main businesses recorded a rise in revenue.

The bank’s net income rose to US$8.38 billion, or US$2.34 per share, from US$6.73 billion, or US$1.76 per share in the year ago period. Analysts had expected earnings of US$2.25 per share, according to I/B/E/S data from Refinitiv.

Net interest income rose 7 percent to US$14.1 billion as the U.S. Federal Reserve raised rates four times since the third quarter of last year, bringing it to 2.25 percent.

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Smaller rivals Citigroup Inc and Wells Fargo are also scheduled to report quarterly results later in the day.

(Reporting by Sweta Singh in Bengaluru; Editing by Saumyadeb Chakrabarty)