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JPMorgan Chase exceeds profit expectations with strong adjusted revenue, benefiting from increased interest rates

JPMorgan Chase Reports Strong Q3 Results Amid Higher Interest Rates

JPMorgan Chase (NYSE:) Surpasses Expectations with Impressive Q3 Performance

JPMorgan Chase, the largest bank in the US by assets, has reported impressive third-quarter results that exceeded expectations. The bank’s revenue and profit were boosted by higher interest rates, which helped offset lower deposit balances.

Adjusted Revenue Beats Estimates, Showing Steady Growth

In the three-month period, JPMorgan Chase recorded adjusted revenue of $40.7 billion, surpassing Bloomberg’s consensus estimate of $39.9 billion. Although slightly lower than the previous quarter’s $42.0 billion, this figure represents a significant 21% year-on-year increase.

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Net Income Exceeds Projections, Demonstrating Strong Performance

The bank’s strong top-line performance translated into a net income of $13.2 billion, surpassing analysts’ projections of $11.9 billion.

Jamie Dimon, CEO of JPMorgan Chase, Acknowledges Positive Results

In a statement on Friday, CEO Jamie Dimon acknowledged the favorable results, while also highlighting that they are influenced by over-earning on net interest income and below-normal credit costs. Dimon emphasized that these factors will eventually normalize over time.

Net Interest Income Rises, Driven by Higher Rates and Revolving Balances

JPMorgan Chase’s net interest income, the difference between interest paid on deposits and interest earned from assets like loans, reached $22.9 billion. This represents a 30% annual increase, primarily driven by elevated rates and higher revolving balances in the bank’s card services unit. The bank has been able to charge higher interest rates on its loans during the Federal Reserve’s rate hikes, while maintaining relatively stable returns for depositors.

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Provisions for Credit Losses Decline, Reflecting Strong Financial Management

The bank’s provisions for credit losses decreased by 10% to $1.4 billion, reflecting both net charge-offs of $1.5 billion and a net reserve release of $113 million. This positive trend exceeded analysts’ expectations of provisions totaling $2.5 billion.

Overall, JPMorgan Chase’s strong performance in the third quarter showcases the bank’s ability to navigate changing market conditions and capitalize on higher interest rates. While CEO Jamie Dimon acknowledges the temporary nature of certain factors contributing to these results, the bank’s solid revenue and profit growth position it favorably for the future.

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