JPMorgan Chase posted better than expected third-quarter results showing $30.44 billion in revenue, surpassing analysts’ $29.8 billion estimates.
The New York City-based investment company and financial services firm had an earnings per share of $3.74. Refinitiv analysts had estimated $3 per share. The earnings included a boost of 52 cents per share from its reserve and 19 cents per share from a tax filing benefit.
The gains occurred after the banking institution released $2.1 billion of reserves to offset charge-offs totaling $524 million.
Jamie Dimon, CEO of JPMorgan, said the bank “delivered strong results as the economy continues to show good growth, despite the dampening effect of the Delta variant and supply chain disruptions. We released credit reserves of $2.1 billion as the economic outlook continues to improve and our scenarios have improved accordingly.”
Dimon has previously stated that managers don’t consider gains from reserve releases to be fundamental to a business. Last year, the bank put aside billions to help offset losses from the pandemic. This year, JPMorgan released the funds once it saw the losses never materialized the way it was expected to.
Analysts have stated that most banking institutions have exhausted the benefits from reserve releases and should now return to raising interest rates and overseeing new loans to boost their profits.
But throughout much of the pandemic, trading revenue has boomed, benefitting JPMorgan’s investment arm. Analysts predicted the activity to moderate more during the third quarter.
Marianne Lake, Co-CEO of the bank’s Consumer and Community Banking, said that the institution’s trading revenue would likely be 10 percent less than last year. Last year’s third quarter was unusually robust.
JPMorgan’s asset and wealth management division posted a revenue increase of 21 percent, settling at $4.3 billion. Balance growths and higher management fees fueled the increase. The bank’s assets management also rose by 17 percent. Growing equity markets increased the assets to $3 trillion.
Overall, JPMorgan shares have soared by 30 percent this year thus far.