(Original title: JPMorgan’s overall strong performance under the double-edged sword of high interest rates, Dimon talks about vigilance against the risk of U.S. recession)
Financial Associated Press, October 15 (Editor Zhao Hao)Before the U.S. stock market opened on Friday (October 14), JPMorgan Chase announced an overall strong third-quarter report, in which revenue and profit were significantly stronger than market expectations.
The specific data of the financial report shows that the investment bank with the largest assets in the United States recorded revenue of US$33.491 billion in the third quarter of this year, which was stronger than the market expectation of US$32.1 billion, an increase of 6% month-on-month and a year-on-year increase of 10%.
In terms of profit, the company recorded $9.737 billion in the third quarter, a year-on-year decrease of 17%. The adjusted EPS was $3.12, which was far less than the $3.74 in the same period last year, but still easily surpassed analysts’ expectations of $2.88.
According to media analysis, for big investment banks, the Fed’s aggressive monetary policy has both positive and negative sides. Higher interest rates give banks greater interest income, with JPMorgan’s net interest income (NII) up 34% year-on-year to $17.6 billion, $600 million higher than market expectations; net of market segment net interest Revenue rose 51% to $16.9 billion.
However, the poor performance of financial markets under the Fed’s tightening has caused the company’s investment banking business fees to plummet, and revenue fell to $1.7 billion, down 43% year-on-year. The report also noted that earnings per share decreased by $0.24 on a $959 million loss on portfolio investments due to the sale of U.S. Treasury securities and mortgage-backed securities (MBS).
In addition, the bank also set aside $808 million for bad debts, which affected profit for the quarter. But overall, the performance of JPMorgan Chase’s three-quarter report is still positive, and the market has also given a positive reaction. As of press time, the three major U.S. stock indexes fell across the board, but JPMorgan Chase’s stock price rose against the trend, rising more than 5% at one point, and now narrowed to 3.2%, at $112.96 per share.
On the conference call, CEO Jamie Dimon noted that both individual and corporate customers have been financially healthy during this period. Unemployment in the U.S. remains low, customers have not yet had trouble repaying their loans, rising interest rates have made the core lending business lucrative, and volatility in financial markets has also benefited fixed income.
However, Dimon sees the economic picture is darkening. Earlier this week, he warned the U.S. would enter a recession of some kind in six to nine months, which is why the bank set aside more than $800 million in bad debt provisions in the third quarter.
“We have enormous headwinds in front of us – stubbornly high inflation, rising global interest rates, uncertainty about quantitative tightening, rising geopolitical risks, and the vulnerability between oil supply and prices,” he said in the earnings report. State. While we hope for the best, we need to remain vigilant and prepare for a bad outcome.”