JPMorgan’s Q3 result beats analysts’ profit estimates

JPMorgan Chase third quarter earnings beat analysts’ earnings amid the reported September money laundering scandal that implicated the bank.

Here’s how JPMorgan performed in the third-quarter:

·        Earnings per share: $2.92 per share, beating analyst’ $2.23 per share

·        Revenue: $29.94 billion, beating analysts’ $28.3 billion

In its much anticipated Tuesday third-quarter result, JPMorgan posted a quarterly profit of $9.44 billion, or $2.92 per share. The bank also held $34 billion in credit reserves amid a “significant economic uncertainty and a broad range of potential outcomes,” according to CEO Jamie Dimon. The bank also noted that the extended suspension of share buybacks will last until the end of fiscal 2020.

The figures beat the Refinitv analysts’ consensus by $2.23 billion. In all, the bank generated revenue of $29.94 billion, approximately $1.5 billion more than analysts’ expectations.

Wall Street analysts expected the JPMorgan to report earnings-per-share (EPS) of $2.24, on revenue of $28,12 billion for the third quarter. If the result was as analysts hoped, it would have marked a 15% decline in profits compared to the same period a year ago.

As the case may be, American banks are faced with the question of whether or not they would continue setting aside money for COVID-related loan defaults.

In the first half of the year, JPMorgan added over $15 billion to its loan reserves. The bank was then left with $32 billion for expected loan defaults by June 30. Analysts expect that the amount for losses in the third quarter should be far lesser. In a note last week, Barclays analyst Jason Goldberg said he expects JPMorgan to build Q3 reserves by $857 million, about 10% less than what it set aside in the previous quarter.

During the third quarter, JPMorgan saw its bottom line get boosted by increased corporate and investment banking. Its markets and securities services revenue also rose 29% to $7.8 billion, with markets revenue up 30% at $6.6 billion compared to 2019.

The bank’s fixed-income trading revenues jumped 29% to $4.6 billion, and its equity trading jumped 32% to $2 billion, while securities services revenue remained at $1 billion. Banking revenue rose 6% at $3.7 billion and investment banking revenue climbed 12% to $2.1 billion.