JPMorgan’s dealmakers and a $2bn infusion of reserves that were meant to cover bad loans helped drive a 24 per cent increase in third-quarter profit at the largest US bank.
The bank on Wednesday reported a profit of $11.7bn, or $3.74 per share, up from $2.92 per share in the same period last year. Analysts had forecast net income to be flat at $9.4bn, according to consensus data compiled by Bloomberg.
JPMorgan showed revenues of $30.4bn for the quarter, up from $29.9bn a year earlier and ahead of analysts’ forecasts for $29.9bn.
“JPMorgan Chase delivered strong results as the economy continues to show good growth — despite the dampening effect of the Delta variant and supply chain disruptions,” Jamie Dimon, JPMorgan chief executive, said in a statement.
The bank released $2.1bn in reserves it had set aside at the outset of the pandemic last year to cover potential loan losses that have so far been much less severe than expected. Net income excluding the reserve release and an income tax benefit was $9.6bn.
Earnings were also boosted by fees from wealth management and investment banking, which picked up the slack from a slowdown in bond trading.
Investment banking revenue was up 45 per cent year on year to $3bn, exceeding analysts’ forecasts for $2.7bn. Investment banks are raking in record sums from fees thanks to a rush of dealmaking.
The bank also reported signs of loan growth in the quarter, which rose 6 per cent year on year. Loan growth has been sluggish in 2021 as large companies still have cash left over from large capital raises in 2020 and consumers have used government stimulus money to pay down debt.