JPM JP Morgan Chase and Co

By David Benoit 

JPMorgan Chase & Co.'s third-quarter profit rose 8% and topped expectations as the bank continued to see strength in its consumer businesses and a strong investment-bank performance.

The nation's largest bank reported a profit of $9.08 billion, or $2.68 a share. Analysts polled by FactSet had expected earnings of $2.45 a share. A year earlier, the bank reported a profit of $8.38 billion, or $2.34 per share.

Revenue rose 8% to $29.34 billion from $27.26 billion a year ago, above analysts' expectations for $28.47 billion.

Chief Executive James Dimon said the economy has slowed but that he isn't predicting timing on a recession and that it isn't clear if the data points to one soon.

"It looks like the U.S. consumer continues to be quite strong," Mr. Dimon said on a call with reporters. "The geopolitics around China and trade are reducing business sentiment ... but it looks like we're still growing."

The bank has now posted year-over-year profit gains for each of the past seven quarters, boosted for most of that time by rising interest rates that had increased the profitability on lending operations. But rate expectations reversed this summer as the Federal Reserve moved from increasing its base rate to cutting rates. Several businesses were crimped by the lower rates.

Even so, the bank's net interest income, the amount it makes from lending minus the interest it pays out, rose 2% to $14.23 billion. The bank said an influx of cheap deposits has helped boost profits even as it is forced to charge less on loans. Analysts said net interest income was better than expected but forecast that 2020 would see a slide that could test the bank's plans to keep investing heavily in its businesses.

JPMorgan shares rallied in September, closing above $120 for the first time in its history. It is up 19% this year, more than the KBW Nasdaq bank index and slightly above the S&P 500. Shares traded recently at $119.47, up 2.6%.

Revenue from non-lending operations at the bank jumped 13% to $15.11 billion.

In the bank's consumer unit, revenue rose 7% to $14.26 billion and in the corporate and investment bank it rose 6% to $9.34 billion.

The consumer bank has remained resilient in the face of a potential economic slowdown, and executives have touted the strength of the U.S. consumer compared with big corporate clients. It said deposit balances and consumer lending revenue increased, allowing it to expand margins in the business.

Profit for JPMorgan's consumer bank rose 5% to $4.27 billion. Income from mortgage fees surged as lower rates pushed consumers to originate or refinance loans.

The bank charged off 1.16% of its consumer loans.

In the corporate and investment bank, profit rose 7% to $2.81 billion. Revenue from the banking side, which includes advisory and treasury work, rose 2% while its trading revenue rose 14%. The bank's fixed-income revenue was up 25%, a surge it said came despite deteriorating markets, as it seeks to take market share in that business.

The bank touted a strong quarter in equity underwriting, with revenue up 22%, and defended its brand as strong after a flood of negative headlines about its work on some IPOs that soured, most prominently its close ties to the collapsed planned offering for WeWork parent We Co.

Chief Financial Officer Jennifer Piepszak said investors are recalibrating their views about private valuations, but batted away media questions about any damage from WeWork specifically.

JPMorgan's two smaller business lines both slipped in the quarter. The commercial bank earned $937 million, down 14%, while its asset management operations earned $668 million, down 8%

Return on equity, a key measure of profitability, was 15% in the third quarter, compared with 14% a year ago. Total expenses rose 5% to $16.42 billion

Write to David Benoit at david.benoit@wsj.com

(END) Dow Jones Newswires

October 15, 2019 10:46 ET (14:46 GMT)

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