JPMorgan Chase reported a jump in third-quarter profits due in part to the release of funds set aside earlier in the pandemic in case of bad loans
New York (AFP) - JPMorgan Chase reported higher third-quarter profits Wednesday as the improving economic outlook allowed it to include in earnings $2.1 billion set aside earlier in the pandemic for potential loan defaults.
The big US bank, kicking off the quarterly earnings season for large financial companies, reported profits of $11.7 billion, up 24 percent from the year-ago period as chief executive Jamie Dimon offered a fairly upbeat outlook.
Revenues rose one percent to $29.7 billion.
Besides the boost from lower reserves for bad loans, JPMorgan’s results were lifted by a surge in financial advisory revenues tied to mergers and acquisition and initial public offerings.
Those gains helped offset a modest decline in revenues tied to trading in financial markets.
The bank saw a 26 percent jump in debit and credit card volumes. But firm-wide loan growth was anemic, the latest instance of modest lending that has been seen as due to the availability of government support programs during the pandemic.
Chief Executive Jamie Dimon called Tuesday’s IMF projection for 5.9 percent growth in 2021 and 4.9 percent growth in 2022 “great numbers,” considering the blow from Covid-19.
“The most important thing is you get good growth,” Dimon said on a conference call with reporters.
“There’s always a chance that will drive higher inflation, but you’ve got to deal with that,” Dimon said, adding, “coming out of Covid, you should be thanking your lucky stars.”
Later on a conference call with analysts, Chief Financial Officer Jeremy Barnum described higher wage inflation as “definitely a watch item.”
The conference call coincided with the release of data showing US consumer prices jumped 5.4 percent, seasonally adjusted, in September compared to the same month last year.
Some of the increase is due to supply chain shortages and logistics snarls. On Wednesday, President Joe Biden’s administration announced a series of moves to address backlogs at the ports of Los Angeles and Long Beach through 24-hour service.
Dimon said some of the problems should abate with time.
“I think there’s a very good chance that a year from now, you won’t be talking about supply chain and there’s a very good chance that a year from now, Covid will be an endemic instead of a pandemic,” he told reporters.
Shares dipped 0.6 percent to $164.40 in pre-market trading.