J. P. Morgan Chase topped analysts' expectations for third-quarter earnings and revenue Friday as better-than-expected retail banking results offset weakness in bond trading.
The nation's largest bank by assets reported that revenue rose 5 percent to $27.8 billion, versus the $27.5 billion average estimate of analysts surveyed by Refinitiv. Earnings per share rose 33 percent to $2.34, beating expectations for $2.25.
Shares of the New York-based bank fell 1 percent on Friday, giving up earlier gains at the open.
Profit in the company's biggest division, consumer banking, surged 60 percent to $4.09 billion as the bank benefited from growing deposits and rising interest rates, resulting in more interest income. The retail bank attracted a record amount of fresh money, Chief Executive Officer Jamie Dimon said in the earnings press release.
The company's net interest margin, a widely-watched measure of profitability, rose 5 basis points from the previous quarter to 2.51 percentage points. That edged out the 2.50 percentage point estimate, showing that the bank is still capitalizing on the interest rate environment.
And the company's provision for credit losses was $948 million, down sharply from $1.5 billion a year earlier and beating the expectation for $1.46 billion as it released reserves because consumer credit improved.
"There were some concerns that interest margins would start to deteriorate," said Octavio Marenzi, who runs management consultancy Opimas. That fear didn't bear out, he said. "There was some weakness in home lending, but cards and consumer banking more than made up for this, as well as a decline in fixed-income markets, but this was at least partially offset by gains in equities."
J.P. Morgan's outlook for core loan growth was still 6 to 7 percent for 2018, the same guidance the bank gave in April. Some analysts had feared that lenders would report slowing loan growth amid rising rates and the administration's trade dispute.