JPMorgan's third-quarter profit rose on investment banking and trading, but its shares fell about 3% in premarket trading. A slowdown in dealmaking and a miss against profit expectations tempered the result.
JPMorgan Chase's profit rose in the third quarter, yet its shares fell 3% in premarket trading as a recent slowdown in dealmaking raised concerns about future growth. The bank posted net income of $15.3 billion, or $5.57 per share, compared with $14.4 billion, or $5.07 per share, a year earlier.
Profit misses expectations as dealmaking cools
However, the result fell short of the $16.3bn analysts expected, according to The Guardian, which tied the miss to a slowdown in the bank's fixed income trading division.
Investment banking fees declined 8% from the second quarter, though they rose 14% from a year earlier. Reuters reported that the IPO market has lost steam in recent weeks after a strong start to the year, and analysts say it is selective, not shut.
Trading and lending hold up
Meanwhile, revenue at the markets division, which houses the equity and fixed-income trading desks, climbed 15% from the prior year. Market volatility tied to uncertainty over global interest rates and surging energy prices boosted trading activity, Reuters reported.
Lending also contributed. Net interest income, excluding markets, increased 6% to $24.7 billion, and average loans rose 10% year over year.
Dimon flags deficits and sticky inflation
Loan growth is under closer watch after the Federal Reserve's September rate hike, its first since 2023, with signals of possible further tightening. Reuters noted that higher borrowing costs and a spike in bond yields could push borrowers out of the credit market.
CEO Jamie Dimon struck a cautious note. According to The Guardian, he said "large fiscal deficits, sticky inflation, elevated asset prices, rising interest rates and geopolitical conditions" continue to shift under the surface.
Sources: Investing.com (Reuters), The Guardian
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