Make Kitco Your Homepage

JPMorgan beats profit estimates on strength in bond trading, underwriting

Kitco News

(Reuters) - JPMorgan Chase & Co (JPM.N) beat Wall Street estimates for quarterly profit by a wide margin on Tuesday, underpinned by strength in bond trading and underwriting.

Revenue at three of the bank’s four main businesses rose, allaying concerns about the impact of an escalating U.S.-China trade war, slowing global growth and low interest rates.

"The consumer remains healthy with growth in wages and spending, combined with strong balance sheets and low unemployment levels," Chief Executive Officer Jamie Dimon said in a statement. (bit.ly/2ML9qO6)

The only business to report a fall in revenue was commercial banking, where lower interest rates hampered results.

Overall, revenue rose 8% to $30.06 billion, well above the average analyst estimate of $28.49 billion on the back of better-than-expected results from the bank’s bond trading business, where revenue rose 25%. Goldman Sachs Group Inc (GS.N) also reported a rise in revenue from the business.

Oppenheimer analyst Chris Kotowski described JPMorgan’s results as “solid”, noting that trading and investment banking results were strong, credit metrics held up well and that the bank managed to produce higher interest income even as rates declined. “Nothing not to like,” Kotowski wrote in a note.

Strength in bond trading helped the bank offset weakness in equity trading, which it blamed on lower derivative trading and M&A advisory fees.

The bank’s net income for the quarter ended Sept. 30 was $9.08 billion, or $2.68 per share, compared with $8.38 billion, or $2.34 per share, a year ago.

Analysts on average had expected the bank to earn $2.45 per share, according to Refinitiv data.

Reporting by Sweta Singh in Bengaluru and Elizabeth Dilts in New York; Editing by Saumyadeb Chakrabarty

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.