JPMorgan profit beats on better-than-expected trading,
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[July 14, 2018]
By Sweta Singh and David Henry
(Reuters) - JPMorgan Chase & Co's <JPM.N>
quarterly profit topped Wall Street's expectations on Friday, as trading
revenue came in much higher than expected and demand for loans increased
on the back of a strengthening U.S. economy.
U.S. banks are benefiting from a cut in corporate tax rates, hikes in
interest rates and a growing economy that is driving demand from
borrowers while holding down loan loss rates.
"We see good global economic growth, particularly in the U.S., where
consumer and business sentiment is high," Chief Executive Officer Jamie
Overall, the bank's revenue rose 6.5 percent to $28.39 billion and
topped the average analyst estimate of $27.36 billion, driven by growth
in all four of the bank's businesses.
Shares of the largest U.S. bank by assets were up 1 percent in premarket
JPMorgan's quarterly reports are closely watched for signs about the
health of consumers and businesses as the lender plays a major role in
several businesses, such as home mortgages, commercial lending and asset
Average core loans, which include consumer credit and loans to the
biggest corporations, were up 7 percent compared with the year-earlier
Analysts and economists are watching loan demand at banks for signs of
any impact from international trade tariffs on their business and
Investors have also been looking for signs that the corporate tax cuts
have given companies new confidence to borrow, a phenomenon that bankers
have said might not show up before the second half of the year.
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A view of the exterior of the JP Morgan Chase & Co. corporate
headquarters in New York City May 20, 2015. REUTERS/Mike Segar/Files
Earlier this week, Dimon was quoted in an Italian newspaper saying that U.S.
business executives have warned U.S. President Donald Trump that the impact of
trade tariffs on economic growth could offset the benefits of tax cuts.
Trading revenue, which makes up about a fifth of JPMorgan's total revenue, was
up 13 percent, compared with a 1 percent gain expected by Credit Suisse analyst
Susan Roth Katzke.
In May, the bank's corporate and investment bank chief, Daniel Pinto, said
second-quarter markets revenue was likely to be flat compared with a year
Net interest income rose 10 percent as the U.S. Federal Reserve raised benchmark
interest rates four times since the second quarter of 2017.
Net income rose 18.3 percent to $8.32 billion, or $2.29 per share, in the second
quarter ended June 30, from $7.03 billion, or $1.82 per share, a year earlier.
Analysts expected the bank to earn $2.22 per share, according to Thomson Reuters
Citigroup Inc <C.N> and Wells Fargo & Co <WFC.N>, the third- and fourth-largest
banks by assets, are also set to report results on Friday.
(Reporting by Sweta Singh in Bengaluru and David Henry in New York; Editing by
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