JPMorgan posted a better-than-anticipated quarterly gain on Tuesday as higher interest income and a decent increase in loans more than made up for a lower activity at the financial institution’s trading desks.
Trading volumes have been lower at large U.S. banks as a tit-for-tat tax war between Beijing and Washington kept traders on edge. A flattening of the profit curve and rising bets of a rate of interest cut have further challenged banks’ capacity to boost revenues.
Average loans at the largest U.S. financial institution; nevertheless, increased 2% on the back of an 8% rise in credit card loans.
Revenue from the bank’s consumer and group banking, its largest enterprise, surged 22% to $4.17 billion, balancing declines across its different primary services.
Total net interest earnings, the gap between what banks pay on deposits and earn on loans, soared 7% to $14.40 billion.
Traders, nonetheless, worry that if the U.S. Federal Reserve cuts rates of interest in July, it could stress margins at banks, which have benefited recently from increased rates.
Net earnings at the bank rose 16% to $9.65 billion. Excluding the tax profit, it earned $2.59 a share. Net income rose 4% to $29.57 billion.
Analysts were predicting earnings of $2.50 per share and revenue of $28.90 billion, based on IBES estimate from Refinitiv.
JPMorgan’s results are closely watched by traders seeking to gauge the health of the U.S. economy. Goldman Sachs Group and Wells Fargo will report quarterly outcomes later in the day.