JPMorgan net income falls as bank sets aside more money to cover potential bad loans
NEW YORK– JPMorgan reported Friday that third-quarter net profit fell 2% as the bank had to set aside more money to cover bad loans.
Net profit fell to $12.9 billion from $13.2 billion in the same quarter last year. However, the New York bank’s earnings per share rose from $4.33 to $4.37, as there are fewer shares outstanding in the latest quarter. That beat the forecasts of Wall Street analysts, who predicted earnings of $3.99 per share, according to FactSet.
JPMorgan set aside $3.1 billion to cover credit losses, compared with $1.4 billion in the same period a year ago.
Total revenue rose to $43.3 billion from $40.7 billion a year ago.
JPMorgan CEO Jamie Dimon said the bank continues to monitor geopolitical tensions that he called “insidious and worsening.” While Dimon did not mention any specific conflicts, he has previously expressed concerns about the war in Ukraine and rising tensions in the Middle East.
“There is significant human suffering, and the outcome of these situations could have far-reaching consequences for both short-term economic outcomes and, more importantly, for the course of history,” Dimon said in a statement.
Dimon often focuses on global and economic issues that go beyond the scope of banking. He is often seen as the banker to whom Washington and world leaders can turn for advice, solicited or unsolicited. His comments tend to resonate across Washington and corporate America.
Net interest income, the difference between the interest the bank receives on its loan portfolio and the interest paid on customer deposits, rose 3% to $23.5 billion. That topped estimates of $22.9 billion, according to FactSet.
The nation’s largest banks have benefited from higher interest rates over the past two years, but these rates are causing consumers and businesses to slow spending due to higher borrowing costs.
The Federal Reserve’s mid-September rate cut came too late in the quarter to significantly impact results, but investors are keeping a close eye on how this rate cut – and expected future rate cuts – will impact banks’ results going forward .
For now, analysts expect JPMorgan’s net interest income to decline in the coming quarters before returning to growth in the second quarter of 2025.
At their last meeting on September 18, Fed officials cut their interest rate from 5.3% to 4.8% over the past two decades and planned another two quarter-point rate cuts in November and December.
Federal Reserve Chairman Jerome Powell said this remains the most likely outcome if the economy continues to show strength as expected.