(Reuters) – JPMorgan Chase & Co (JPM.N) reported a better-than-expected quarterly profit on Tuesday as higher interest income and a modest increase in loans more than made up for lower activity at the bank’s trading desks.
A sign of JP Morgan Chase Bank is seen in front of their headquarters tower in Manhattan, New York, U.S., November 13, 2017. REUTERS/Amr Alfiky
Trading volumes have been lower at large U.S. banks as a tit-for-tat tariff war between Beijing and Washington kept investors on edge. A flattening of the yield curve and rising bets of an interest rate cut have also challenged banks’ ability to boost revenues.
Average loans at the largest U.S. bank, however, increased 2% on the back of an 8% rise in credit card loans.
“We continue to see positive momentum with the U.S. consumer – healthy confidence levels, solid job creation and rising wages – which are reflected in our Consumer & Community Banking results,” Chief executive Officer Jamie Dimon said in a statement.
Income from the bank’s consumer and community banking, its largest business, rose 22% to $4.17 billion, offsetting declines across its other main businesses.
Total net interest income, the difference between what banks pay on deposits and earn on loans, rose 7% to $14.40 billion.
Investors, however, worry that if the U.S. Federal Reserve cuts interest rates in July, it could pressure margins at banks, which have benefited recently from higher rates.
Net income at the bank rose 16% to $9.65 billion. Excluding the tax gain, it earned $2.59 per share. Net revenue rose 4% to $29.57 billion.
Analysts were expecting earnings of $2.50 per share and revenue of $28.90 billion, according to IBES estimate from Refinitiv.
JPMorgan’s results are closely watched by investors looking to gauge the health of the U.S. economy. Goldman Sachs Group Inc (GS.N) and Wells Fargo & Co (WFC.N) will report quarterly results later in the day.
Reporting by Elizabeth Dilts in New York and Sweta Singh in Bengaluru; Editing by Saumyadeb Chakrabarty