Banking giant JPMorgan Chase’s profit soared 67% in the second quarter compared to the same period last calendar year.
The financial services firm reported a rise in second-quarter profit on Friday, buoyed by a rise in earnings linked to higher interest rates, as executives described the US economy as “resilient” but face risks. AFP informed of.
Profit was $14.5 billion, up 67% from the year-ago period, while revenue rose 34% to $41.3 billion. JPMorgan Chief Executive Jamie Dimon said consumers are still spending but are “slowly using up their cash buffers.”
The results were the first to include the acquisition of First Republic Bank by JPMorgan under a government-orchestrated spring auction after the small lender took a deadly hit on deposits.
JPMorgan’s earnings included a one-time “deal purchase gain” on First Republic of $2.7 billion.
But the acquisition also increased JPMorgan’s credit costs in the quarter. The bank added $1.5 billion in reserves for bad loans. But excluding First Republic, that figure would have been $326 million, JPMorgan said in its press release.
Dimon expressed cautious optimism about the US economy.
“The US economy continues to be resilient,” Dimon said. “Consumer balance sheets remain healthy, and consumer spending is picking up, albeit at a slightly slower pace. Labor markets have softened somewhat, but job growth remains strong.
“That being said, there are still major risks in the immediate term,” he said, referring to a range of issues including “extremely high” inflation, the Federal Reserve’s unprecedented “quantitative tightening” policies and the war in Ukraine.
The results topped analyst estimates in both earnings and revenue per share. Shares jumped 3.2% to $45.10 in pre-market trading.