JPMorgan Chase & Co (NYSE: JPM) reported better-than-anticipated fiscal 2022 third-quarter results. However, the banking behemoth’s quarterly earnings were 17% lower than the comparable period last year. The decline was primarily led by an increase in provision for credit losses. The stock of JPMorgan ended Friday’s trading session at $111.19, up 1.66% or $1.82 in the past 24 hours.
The New York-based company posted third-quarter revenue of $32.72 billion, up 10% from $29.65 billion in the prior-year period. On a managed basis, JPMorgan recorded 3Q 2022 net revenue of $33.49 billion, an increase from $30.44 billion in 3Q 2021.
For the latest quarter, JPMorgan recorded a net income of $9.74 billion, or $3.12 per share, a 17% decline from $11.69 billion, or $3.74 a share, in the quarter that ended August 2021.
Analysts surveyed by Refinitiv had anticipated the company to post earnings of $2.88 per share on revenues of $32.10 billion for the reported quarter.
Jamie Dimon, Chairman and CEO, commented on the financial results, said: “The investments we have made over the years, the discipline and rigor with which we manage the Firm, and the extraordinary efforts by our people have enabled us to consistently serve our customers, clients, and communities around the world.”
Segment wise,
- Consumer & Community Banking (CCB) revenues surged 14% y-o-y to $14.33 billion. Specifically, consumer and business banking revenues were $8.01 billion, up 30% from last year.
- Corporate & Investment Bank (CIB) revenues declined 4% y-o-y to $11.87 billion. In particular, Banking revenues were $4.03 billion, a decrease of 18% from the prior-year period. Also, Markets & Securities Services grew by 5% to $7.85 billion.
- Commercial Banking (CB) revenues surged 21% y-o-y to $3.048 billion.
- Asset & Wealth Management (AWM) revenues were $4.54 billion, an increase of 6% from the past year.
Net interest income surged 34% y-o-y to $17.60 billion, led by higher cash rates. Non-interest revenue, however, fell 8% to $15.90 billion, primarily due to a drop in investment banking fees and $959 million in investment securities losses related to corporate and lower net production revenue in Home Lending, primarily negated by a rise in CIB Markets revenue.
Noninterest expense was $19.18 billion, an increase of 12% from the year-ago quarter. The increase was led by a rise in structural costs and ongoing investments in business, including marketing and technology.
The Q3 2022 provision for credit losses stood at $1.54 billion, compared with a net benefit of $1.53 billion in Q3 2021. JPMorgan, in its quarterly report, has indicated that it has increased the reserve build by $808 million. In addition, the financial institution has recorded $727 million in charge-offs.
The quarterly earnings beat is expected to keep JPMorgan’s stock bullish in the short term.
Technically, the stock of JPMorgan is rising after testing support at 105. The next resistance is anticipated only near 130. Additionally, the stochastics oscillator is in the oversold region. Therefore, we anticipate the share price of JPMorgan to appreciate further in the days ahead.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
