NEW YORK/SAN FRANCISCO (awp international) – Investment banking brought the US financial institutions JPMorgan and Wells Fargo a surprising amount of profit in the summer. In the third quarter, both institutions earned less than a year earlier. But analysts had expected steeper declines. JPMorgan boss Jamie Dimon even expects higher interest income for 2024, even though the US Federal Reserve lowered key interest rates in September for the first time in four years. However, the manager warned of disastrous consequences of geopolitical conflicts.
The news was received positively on the stock market. JPMorgan shares gained 3.3 percent to $219.79 shortly after trading began in New York on Friday. Wells Fargo shares rose 5.8 percent. Since the turn of the year, both stocks have already increased significantly – JPMorgan by almost 30 percent and Wells Fargo by around a quarter.
In the third quarter, JPMorgan earned 12.9 billion US dollars (11.8 billion euros), two percent less than a year earlier, as the institute announced on Friday in New York. This was primarily due to increased revenue: adjusted earnings increased by six percent to $43.3 billion and clearly exceeded analysts’ expectations.
On the other hand, management set aside $3.1 billion for bad loans, more than twice as much as in the summer of 2023. However, increased income, especially in the investment bank, more than offset this burden.
Contrary to expectations, JPMorgan was even able to increase interest income. Compared to summer 2023, they increased by three percent to $23.5 billion. The bank management therefore also became more optimistic for the year as a whole. In 2024, net interest income should now reach around $92.5 billion instead of $91 billion.
However, JPMorgan boss Dimon spoke of a bleak outlook for the world. Recent geopolitical events showed that conditions were dangerous and deteriorating. The severe suffering of many people could have far-reaching short-term consequences for the economy – and for the future development of history. However, inflation is declining and the US economy remains resilient.
At JPMorgan’s competitor Wells Fargo, however, net interest income fell by eleven percent in the summer. At the major San Francisco bank, the in-house investment banking also helped cushion the decline in profits. The bank earned around $5.1 billion in the third quarter, eleven percent less than a year earlier, as it announced in San Francisco.
