JPMorgan earnings fall 2% despite strong Wall Street performance

JPMorgan Chase (JPM) profits fell in the third quarter as the company set aside more money to cover future loan losses, but its trading beat expectations on Wall Street.

Net income was $12.9 billion, down 2% from the same period last year, as provisions for credit losses rose to $3.1 billion, up 125% from the same period last year.

That could be a sign that the U.S.'s largest bank expects conditions to worsen for some of its borrowers, particularly in the credit card business.

But JPMorgan's investment banking division performed better than analysts expected, with revenue rising 29% from a year ago to $2.4 billion.

That should bolster Wall Street's belief that dealmaking is back on track after a two-year drought.

There were further positive signs from JPMorgan's results. Total revenue increased and a key measure of loan profit, net interest income, also increased. The bank even increased its estimate of how much net interest income it expects for the full year by $1.5 billion.

The bank's shares rose more than 1% in premarket trading.

The results kicked off a third-quarter earnings season as lenders question what impact a new cycle of interest rate cuts from the Federal Reserve will have on the largest U.S. banks.

JPMorgan CEO Jamie Dimon said his bank “reported solid business and financial results in the third quarter,” but also highlighted concerns about geopolitics, saying: “Recent events show that conditions are treacherous and getting worse.”

He said “inflation is slowing and the U.S. economy remains resilient,” but “some critical issues remain, including large budget deficits, infrastructure needs, trade restructuring and global remilitarization.”

“While we hope for the best, these events and the prevailing uncertainty demonstrate why we must be prepared for any environment.”

David Hollerith is a senior reporter at Yahoo Finance, covering banking, crypto and other financial areas.

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