JPMorgan Chase posted another quarter of record net interest income and boosted its forecast for the year as it benefits from higher interest rates and its purchase of First Republic Bank.
NII, a major source of revenue, was $22.9 billion in the three months through Sept. 30, above analysts' expectations. The biggest U.S. bank said it now expects to generate $88.5 billion from the revenue source this year.
"We acknowledge that these results benefit from our over-earning on both net interest income and below normal credit costs, both of which will normalize over time," CEO Jamie Dimon said in a statement Friday. But the CEO warned that the wars in Ukraine and the Middle East could have far-reaching consequences. "This may be the most dangerous time the world has seen in decades," Dimon said.
Shares of JPMorgan, up 8.7% this year through Thursday, climbed 0.1% in early New York trading.
The bank's third-quarter results offer the latest look at how U.S. consumers and businesses are faring as the Federal Reserve leaves borrowing costs higher for longer than most economists had predicted. Wells Fargo and Citigroup also report results Friday, with Bank of America, Goldman Sachs Group and Morgan Stanley slated for next week.
JPMorgan's results also provide a snapshot of how the company is integrating First Republic Bank, which it purchased in a government-led auction in May. Dimon said in August that the process had been "excellent," and that the regional bank turmoil that led to First Republic's collapse is "over for now."
Friday also kicks off the first round of bank earnings since U.S. regulators proposed a new set of capital rules that would force the eight largest lenders to boost the amount they set aside by about 19%. Wall Street executives have said the increased requirements would slow the economy. Investors are keen for further executive commentary on what the possible fallout might be.
JPMorgan's total loans rose 18% from a year earlier. Deposits fell 1%.
The lender reported $1.5 billion in net charge-offs, citing credit card loans for the increase. Dimon said last month that higher card losses are "normalization" from exceptionally low levels in recent years, and that his firm has been "over-earning on credit." JPMorgan reduced the pile of money set aside for potentially soured loans by $113 million, while analysts had expected a reserve build.
Markets revenue fell from a year ago, driven by a 10% drop in equity trading. That was partially offset by a surprise 1% gain for fixed-income traders, while analysts had expected slight drop.
