JPMorgan Q3 Profit Up 24%, Results Top Estimates

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US investment bank JPMorgan Chase & Co. (JPM) reported Wednesday a profit for the third quarter that grew 24 percent from last year, driven by primarily by an income tax benefit and higher credit reserve releases. Both adjusted earnings per share and revenues for the quarter topped analysts' expectations.

"JPMorgan Chase delivered strong results as the economy continues to show good growth - despite the dampening effect of the Delta variant and supply chain disruptions," said Jamie Dimon, Chairman and CEO.

Net income for the quarter grew to $11.69 billion or $3.74 per share from $9.44 billion or $2.92 per share in the prior-year quarter.

The current quarter primarily included an income tax benefit of $566 million related to finalizing the Firm's 2020 U.S. federal tax return. Excluding significant items, adjusted net income for the quarter was $9.6 billion or $3.03 per share.

On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $3.00 per share for the quarter. Analysts' estimates typically exclude special items.

The provision for credit losses was a net benefit of $1.53 billion, compared to last year's expense of $611 million, driven by net reserve releases of $2.1 billion and $524 million of net charge-offs.

Total net revenue on a reported basis was $29.65 billion. On a managed basis, net revenue was $30.44 billion, up 1 percent from $29.94 billion in the previous year. Wall Street expected revenues of $29.76 billion for the quarter.

Net interest income was $13.2 billion, up 1 percent, driven by balance sheet growth and higher rates, primarily offset by change in balance sheet mix and lower net interest income in CIB Markets.

Non-interest revenue was $17.3 billion, up 3 percent from last year, largely driven by higher Investment Banking fees in CIB and management fees in AWM, predominantly offset by net investment securities losses in Corporate compared to net gains in the prior year and lower revenue in Home Lending.

Noninterest expense was $17.06 billion, up 1 percent, driven by continued investments in the business including marketing and technology, and higher volume- and revenue-related expense, predominantly offset by lower legal expense and structural expense.

Consumer & Business Banking net revenue was $6.16 billion, up 8 percent, predominantly driven by growth in deposit balances and client investment assets as well as increased debit transactions, partially offset by deposit margin compression.

Banking revenue surged 30 percent to $4.89 billion, while markets & securities services revenue declined 4 percent to $7.50 billion from last year.

The bank said it is more than halfway through its plan to open 400 branches in new markets by the end of 2022, with approximately 30 percent of these branches in low-to-moderate income communities. It is also expanding its retail presence internationally, most recently launching its digital retail bank in the U.K.

"We are making important investments, including strategic, add-on acquisitions that will drive our firm's future prospects and position it to grow and prosper for decades. This quarter, we became the first bank to have branches in all of the lower 48 states, allowing us to serve more households, businesses and communities across the country," Dimon added.

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