JPMorgan Profits Jump In Q2 On Higher Interest Rates, Visa Shares
By Ken Sweet
NEW YORK (AP) — JPMorgan Chase’s profits jumped sharply in the second quarter as the bank cashed in billions of dollars of its holdings in Visa Inc. But the bank’s results were also helped by higher interest rates, as well as consumers who seemed to still want to spend, despite geopolitical and economic uncertainties.
The nation’s biggest bank by assets on Friday posted a profit of $18.15 billion, up 25% from a year earlier. On a per share basis, JPMorgan earned $6.12 per share, which beat analysts’ estimates.
A significant part of JPMorgan’s results was a $7.9 billion gain on its stake in Visa. The bank converted its ownership in the payment processing giant into common stock in the second quarter. The bank also donated $1 billion of Visa shares to JPMorgan’s philanthropic organization.
Without the gain, profit fell compared with the year-ago quarter due to higher expenses. The bank set aside $3.1 billion to cover potentially bad loans, up sharply from a year earlier, as the bank acknowledged that delinquencies were climbing among some Americans. On a call with reporters, executives said they remain unconcerned about the rising delinquencies, adding that the U.S. consumer is doing just fine.
JPMorgan CEO Jamie Dimon repeated his warnings about heightened geopolitical risks and inflation in his statement to investors. Dimon, in several interviews, has said he believes that Americans and the bank should be preparing for inflation to remain higher than normal for longer than people are expecting.
“There has been some progress bringing inflation down, but there are still multiple inflationary forces in front of us: large fiscal deficits, infrastructure needs, restructuring of trade and remilitarization of the world,” he said.
The latest government reading on consumer prices Thursday showed that price pressures are easing but remain above levels preferred by the Federal Reserve. Still, Wall Street is betting that the Fed has made enough progress brining inflation down that it will cut interest rates at its policy meeting in September.
Two other banks are reporting their results Friday: Wells Fargo and Citigroup.
Wells Fargo earned $4.91 billion in the second quarter, or $1.33 per share, which beat Wall Street targets and last year’s $1.25 per share profit. Revenue of $20.7 billion also beat analyst forecasts and last year’s $20.5 billion.
Wells said growth in fee-based revenue helped to offset declines in net interest income — the difference between what it earned on loans and what it paid out to depositors — which fell 9% to $11.9 billion. That figure was below Wall Street expectations and the bank's shares fell more than 5% in premarket trading.
The San Francisco bank said average loans fell again, to $917 million from $946 million a year ago, as elevated interest rates kept many borrowers on the sidelines.
It was Wells Fargo’s second earnings report since the Biden administration eased some of the restrictions on the bank after a series of scandals.
Chris Williamson, Chief Business Economist at S&P Global, breaks down September’s CPI print and inflation trends, explaining what it means for markets.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
