JPMorgan Chase posts US$9b profit for quarter
Friday, April 12, 2019
JPMorgan Chase’s first-quarter profits grew by 5 percent from a year earlier, helped largely by higher interest rates, which have allowed banks like JPMorgan to charge more for loans. Higher interest rates helped make up for a drop in trading revenue.
The largest bank by assets and profits in the US said Friday that it earned US$9.18 billion, or US$2.65 per share. That’s up from US$8.71 billion, or US$2.37 per share, in the same period a year ago. The results beat analysts’ estimates for earnings of US$2.35 per share, according to FactSet.
Banks have benefited in the last two years from the Federal Reserve’s decision to steadily raise interest rates, after keeping them near-zero for several years. The Fed raised rates four times in 2018, each time by a quarter of a percentage point. Higher interest rates mean banks can charge borrowers more for their loans, which directly contributes to banks’ bottom lines.
JPMorgan’s net interest income grew by 8 percent from a year ago, while non-interest income was relatively flat, up 1 percent.
While JPMorgan was able to charge more for loans, at the same time it was able to hold down the amount of money it was paying depositors for their cash. JPMorgan paid 0.8 percent on interest-bearing deposits in the quarter, compared with 0.41 percent on deposits a year ago.
JPMorgan’s trading operations had a less than stellar quarter. Its corporate and investment banking division reported a profit of US$3.25 billion, down from US$3.97 billion a year earlier. Most of that decline was due to a drop in trading revenue
Firm-wide revenue for the quarter was US$29.85 billion, compared with US$28.52 billion a year earlier. That also beat analysts’ estimates.-AP