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JPMorgan Q3 Results Top Estimates, Profit Up 8%

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US investment bank JPMorgan Chase & Co. (JPM) reported Tuesday a profit for the third quarter that increased 8 percent from last year, driven by record revenues, partially offset by higher provision for credit losses and lower interest rates. Both earnings per share and revenues for the quarter topped analysts' expectations.

"JPMorgan Chase delivered record revenue this quarter, demonstrating broad-based strength and the resilience of our business model despite a more challenging interest rate backdrop," said Jamie Dimon, Chairman and CEO.

Net income for the third quarter grew 8 percent to $9.08 billion from last year's $8.38 billion, with earnings per share increasing 15 percent to $2.68 from $2.34 in the prior year.

On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $2.45 per share for the quarter. Analysts' estimates typically exclude special items.

The provision for credit losses surged 60 percent to $1.51 billion from $948 million in the prior year, largely as a result of reserve releases and net recoveries in the prior year.

Total net revenue rose to $29.3 billion from $27.3 billion in the prior-year quarter. On a Managed Basis, net revenue was $30.06 billion, up 8 percent from $27.82 billion in the previous year. Wall Street expected revenues of $28.49 billion for the quarter.

Net interest income was $14.4 billion, up 2 percent, driven by continued balance sheet growth and mix, largely offset by the impact of rates. Non-interest revenue was $15.7 billion, up 14 percent from last year. This included about $350 million of gains related to loan sales in Home Lending.

Excluding these gains, the increase in noninterest revenue was largely driven by results in Fixed Income Markets in the Corporate & Investment Bank as well as Home Lending and Auto in Consumer & Community Banking.

Noninterest expense was $16.42 billion, up 5 percent, driven by higher volume- and revenue-related expenses and investments, including compensation and auto lease depreciation, partially offset by lower FDIC charges.

Consumer & Business banking net revenue was $6.7 billion, up 5 percent, predominantly driven by higher net interest income as a result of growth in deposit balances and margin expansion, as well as higher noninterest revenue on higher transaction volumes.

Banking revenue was $3.3 billion, up 2 percent. Investment banking revenue was $1.9 billion, up 8 percent, driven by higher debt and equity underwriting fees, partially offset by lower advisory fees, and reflected wallet share gains across products.

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