NEW YORK: JPMorgan Chase reported higher second-quarter profits Friday thanks to better results in investment banking and a gain on Visa shares, although earnings were dampened by higher costs for bad loans.
Profits at the big US bank came in at $18.1 billion, up 25 percent from the year-ago period. The earnings were boosted by a $7.9 billion gain from a share-exchange transaction with Visa.
Revenues rose 22 percent to $50.2 billion.
The lender, the biggest US bank by assets, pointed to a boost from higher investment banking fees and asset management fees, as well as a lift from greater net interest income (NII); NII is based on the interest JPMorgan earns on loans less the interest it pays out to depositors.
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The provision for credit losses rose five percent to $3.1 billion, with JPMorgan citing credit cards as a driver of both charge-offs in the latest quarter and reserves over future potential losses.
The bank has noted that consumer balance sheets were boosted by government payout programs during Covid-19 that have largely lapsed. JPMorgan described the rising delinquencies as “credit normalization.”
Chief Executive Jamie Dimon said the bank had performed “well” in the quarter, but reiterated his concerns about the outlook.
“While market valuations and credit spreads seem to reflect a rather benign economic outlook, we continue to be vigilant about potential tail risks,” said Dimon, who restated worries about geopolitical tensions and the risk that inflation and interest rates will stay high.
Shares fell 1.2 percent in pre-market trading.
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