(Original title: JPMorgan’s good overall performance under the double-edged sword of high interest rates, Dimon talks about US recession risk vigilance)
Financial Associated Press, October 15 (Publisher Zhao Hao)Prior to the US stock market opening on Friday (Oct 14), JPMorgan Chase announced an overall positive report for the third quarter, where revenue and profits were significantly above market expectations.
According to specific data from the financial report, the investment bank with the largest assets in the United States recorded revenues of $ 33.491 billion in the third quarter of this year, exceeding market expectations of $ 32.1 billion. with a 6% increase on a monthly basis and a 10% year-over-year increase.
In terms of profit, the company recorded $ 9.737 billion in the third quarter, down 17% year-on-year. Adjusted EPS was $ 3.12, which was far below the $ 3.74 of the same period last year, but still easily exceeded analysts’ expectations of $ 2.88.
According to media analysis, for large investment banks, the Fed’s aggressive monetary policy has both positive and negative sides. Higher interest rates provide banks with higher interest income, with JPMorgan’s interest margin (NII) rising 34% year-over-year to $ 17.6 billion, $ 600 million more than market expectations ; net of market segment net interest income, revenues increased 51% to $ 16.9 billion.
However, the poor performance of financial markets under the Fed tightening caused the company’s investment banking fees to drop and revenue dropped to $ 1.7 billion, down 43% year-on-year. The report also found that earnings per share declined by $ 0.24 on a $ 959 million loss on portfolio investments due to the sale of US Treasuries and Mortgage Backed Securities (MBS).
In addition, the bank also allocated $ 808 million for bad debts, which impacted the quarter’s profit. But overall, the performance of JPMorgan Chase’s quarterly report is still positive and the market has also given a positive reaction. As of press time, the three major US equity indices have fallen across the board, but JPMorgan Chase’s share price has risen against the trend, rising more than 5% at one point, and has now fallen to 3 , 2%, at $ 112.96 per share.
During the conference call, CEO Jamie Dimon noted that both individual and corporate clients have been financially healthy during this time. Unemployment in the US remains low, customers have not yet had a problem repaying their loans, rising interest rates have made core lending profitable, and volatility in financial markets has also benefited fixed income.
However, Dimon sees that the economic picture is darkening. Earlier this week, he warned that the United States would enter some sort of recession in six to nine months, which is why the bank made over $ 800 million in bad debt provisions in the third quarter.
“We have huge headwinds ahead of us: stubbornly high inflation, rising global interest rates, uncertainty about quantitative tightening, growing geopolitical risks and vulnerability between oil supply and prices,” he said in the earnings report. for the best, we must remain vigilant and prepare for a bad result. “
