Investment banking is curbing profit declines at JPMorgan and Wells Fargo

NEW YORK/SAN FRANCISCO (dpa-AFX) – JPMorgan investment banking has US financial institutions US46625H1005 and Wells Fargo than US9497461015 that brought an incredible profit this summer. In the third quarter, both institutions earned less than a year earlier. But analysts had expected a steeper decline. JPMorgan chief Jamie Dimon even expects higher interest income for 2024, even though the US Federal Reserve lowered key interest rates in September for the first time in four years. However, the manager warned about the disastrous consequences of geopolitical conflicts.

Good news was received on the stock market. JPMorgan shares gained 3.3 percent to $219.79 shortly after trading began in New York on Friday. Wells Fargo shares rose 5.8 percent. Since the beginning of the year, both stocks have already risen significantly – JPMorgan by nearly 30 percent and Wells Fargo by about a quarter.

In the third quarter, JPMorgan earned 12.9 billion US dollars (11.8 billion euros), two percent less than a year earlier, as the institute announced on Friday in New York. This was primarily due to increased revenue: adjusted earnings rose six percent to $43.3 billion and clearly exceeded analysts’ expectations.

On the other hand, management set aside $3.1 billion for bad loans, more than twice as much as in the summer of 2023. However, there was more revenue, especially in the investment bank, more than makes up for this burden.

Contrary to expectations, JPMorgan was even able to increase interest income. Compared to the summer of 2023, they increased by three percent to $23.5 billion. Therefore the management of the bank became more optimistic for the whole year. In 2024, net interest income should now reach around $92.5 billion instead of $91 billion.

However, JPMorgan CEO Dimon spoke of a bleak outlook for the world. Recent geopolitical events showed that conditions were dangerous and getting worse. The suffering of many people could have long-term consequences for the economy – and for the future development of history. However, inflation is declining and the US economy remains resilient.

At JPMorgan competitor Wells Fargo, however, net interest income fell eleven percent this summer. At San Francisco’s leading bank, the in-house investment banking also helped cushion the decline in profits. The bank earned about $ 5.1 billion in the third quarter, eleven percent less than a year earlier, as it announced in San Francisco.

The bank’s total income fell two percent to $20.4 billion across the group due to lower net interest income. Unlike JPMorgan, however, Wells Fargo set aside less money for impending loan defaults than in the same period last year: additions to risk provisions fell eleven percent to just under $1.1 billion./stw/month

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JPMorgan Zinsüberschuss von Bloomberg: The bank said that NII for 2024 will come in at around $92.5 billion, compared to the previous forecast of around $91 billion.

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JPMorgan (pp. 1 and 2, investment bank p. 4): https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/quarterly-earnings/2024 / 3rd quarter/66269bb6-ecc5-4172-b461-6b7e7cd47aab.pdf

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Wells Fargo PM (pp. 1 and 2): https://www.wellsfargo.com/assets/pdf/about/investor-relations/earnings/third-quarter-2024-earnings.pdf