Financial Performance

Consumer Loans Drive JPMorgan Earnings Beat

The bank reports average core loans rose 8% in the third quarter, offsetting a 27% drop in fixed income trading revenue.
Matthew HellerOctober 12, 2017

JPMorgan Chase reported quarterly earnings on Thursday that beat analysts’ estimates as better-than-expected loan demand offset continued weakness in trading operations.

For the third quarter, the bank posted net income of $6.7 billion, or $1.76 per share, on revenue of $26.2 billion. Analysts had forecast earnings of $1.65 per share on revenue of $25.23 billion.

Fixed income trading revenue fell 27% to $3.16 billion, worse than the $3.25 billion projected by FactSet. That side of JPMorgan’s business has been hit by low markets volatility amid steadily rising stock prices.

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But consumer and community banking posted a 6% increase in revenue to $12 billion and a 16% jump in net income to $2.6 billion. Average core loans rose 8%, and average deposits totaled $646 billion, up 9%.

“JPMorgan Chase delivered solid results in a competitive environment this quarter with steady core growth across the platform,” CEO Jamie Dimon said in a news release. “And for the first time, the firm led the nation in total U.S. deposits, as consumers and businesses continue to view us as their partner of choice.”

Dimon had said last month that he expected trading revenue to fall about 20% due to sleepy markets. The lower revenue was “driven by sustained low volatility and tighter credit spreads, against a very strong prior year,” the bank said.

But JPMorgan is continuing to benefit from consumers’ willingness to take out loans and make purchases with credit cards. “The global economy continues to do well and the U.S. consumer remains healthy with solid wage growth,” Dimon said.

In a memo to employees, Daniel Pinto, head of the corporate and investment banking unit, said the business produced a “very healthy” quarter overall, adding, “It was one of our strongest investment banking quarters in a decade and our large transaction businesses each generated over $1 billion of steady revenue.”

JPMorgan shares fell 0.9% to $95.99 in trading Thursday, but the stock is up 5.3% over the past 30 days. Bank stocks have risen recently on hopes that the Trump administration’s proposed tax cuts will become law.

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