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The
biggest U.S. bank's results are being closely watched to assess
the real impact on corporate America of the Federal Reserve's
aggressive rate hikes to tamp down inflation.
"In the U.S., consumers continue to spend with solid balance
sheets, job openings are plentiful and businesses remain
healthy," Chief Executive Officer Jamie Dimon said in a
statement.
Dimon, however, cautioned that rising interest rates, inflation
and geopolitical turmoil pose significant headwinds.
Typically, rising interest rates are good for banks because they
can charge consumers more for borrowing, but the broader risk of
an economic slowdown, higher cost of borrowing and the war in
Ukraine could cloud the economic outlook and hurt future
earnings.
JPMorgan's profit for the quarter ended Sept. 30 came in at
$9.74 billion, or $3.12 per share, compared with $11.69 billion,
or $3.74 per share, a year earlier.
Analysts had expected $2.88 per share. It was not immediately
clear if the reported numbers were comparable to estimates.
The bank set aside $808 million in reserves, as the Fed's
interest rate hikes stoke fears of an economic downturn.
By comparison, in the same quarter last year, the bank had
released $2.1 billion of reserves that it had kept aside for
potential COVID losses.
Revenue from investment banking, one of the bank's biggest
businesses, slumped 43% to $1.7 billion as a mix of high
inflation and fears of looming recession forced buyers and
sellers to hit pause on deals.
The dearth of activity has led to a slump in banks' fees from
underwriting and advising M&A and initial public offerings,
contrasting a record run last year.
The bank reported $32.72 billion in revenue for the quarter, up
from $29.65 billion last year.
(Reporting by Niket Nishant and Noor Zainab Hussain in Bengaluru
and Lananh Nguyen in New York; Editing by Saumyadeb Chakrabarty)
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