JPMorgan Chase (JPM) posted better-than-expected third-quarter earnings Friday, while setting aside nearly a $1 billion to cover potentially bad loans in a weakening domestic economy, as income from rising interest rates offset a slump in global dealmaking.
JPMorgan said earnings for the three months ending in September were pegged at $3.32 per share, down 11.2% from he same period last year abut firmly ahead of the Street consensus forecast of $2.89 per share.
Managed revenues, JPMorgan said, rose 7.5% to $32.7 billion, just ahead of analysts' estimates of a $32.03 billion tally, while net interest income rose 33% to $17.6 billion. Investment banking fees, JPMorgan said, fell 43% to just $1.7 billion.
Merger activity is down around 55% from last year's levels, according to Refinitiv data, with just $692 billion in deals completed - the lowest total since the second quarter of 2020 and the biggest year-on-year decline since 2009.
“U.S. consumers continue to spend with solid balance sheets, job openings are plentiful and businesses remain healthy," said CEO Jamie Dimon. "However, there are significant headwinds immediately in front of us: stubbornly high inflation leading to higher global interest rates, the uncertain impacts of quantitative tightening, the war in Ukraine, which is increasing all geopolitical risks, and the fragile state of oil supply and prices."
"While we are hoping for the best, we always remain vigilant and are prepared for bad outcomes so we can continue to serve customers even in the most challenging of times," Dimon added.
JPMorgan shares were marked 3.8% higher in early Friday trading immediately following the earnings release to change hands at $113.47 each.
Citigroup was also able to offset the dealmaking slump with stronger-than-expected net interest income gains and a 40% jump in revenues from its global Treasury and trade solutions business.
Citigroup said earnings for the three months ending in September were pegged at $3.5 billion, or $1.63 per share, down 24.1% from the same period last year but well ahead of the Street consensus forecast of $1.42 per share.
Group revenues, Citigroup said, rose 7.6% to $18.5 billion, coming in just ahead of analysts' estimates of an $18.26 billion tally.
