JPMorgan Chase profits jump, warns inflation could persist

NEW YORK: JPMorgan Chase reported another highly profitable quarter Friday, but warned inflation could persist and said recent Middle East turmoil means this “may be the most dangerous time the world has seen in decades.”

The lender, the biggest US bank in terms of assets, reported third-quarter profits of $13.2 billion, up 35 percent from the year-ago period behind the lift from higher interest rates on earnings.

Revenues rose 22 percent to $39.9 billion. Besides the boost from interest rates — reflecting the gap between the lending rate it charges clients compared with interest payments to customers — JPMorgan also cited good credit quality as a driver.

Throughout the Covid-19 period and in the immediate aftermath, consumers have largely successfully managed credit card payments, although delinquencies have risen in recent quarters.

Chief Executive Jamie Dimon said the bank expects both exceptionally high net interest income and low loan defaults to “normalize” over time.

These positive elements helped JPMorgan offset some areas of weakness such as corporate and investment banking, where overall revenues dipped two percent. JPMorgan said the results excluded the impact of its purchase of First Republic. Dimon said “US consumers and businesses generally remain healthy, although, consumers are spending down their excess cash buffers,” according to a press release.

“However, persistently tight labor markets as well as extremely high government debt levels with the largest peacetime fiscal deficits ever are increasing the risks that inflation remains elevated and that interest rates rise further from here,” said Dimon.

“The war in Ukraine compounded by last week’s attacks on Israel may have far-reaching impacts on energy and food markets, global trade, and geopolitical relationships.