JPMorgan's profits rise 18 percent, helped by lower taxes
JPMorgan Chase's second-quarter profits rose by 18 percent from a year ago, as the nation's largest bank by assets and revenue continues to benefit from higher interest rates and a lower tax bill following last year's passage of President Donald Trump's tax law.
JPMorgan said Friday that it earned $8.32 billion in the first quarter, or $2.29 a share, up from $7.03 billion, or $1.82 a share, in the same period a year earlier. The results from the New York-based bank beat analysts' expectations for earnings of $2.22 a share.
The bank's top executives continue to be positive on their outlook for the company and more broadly the U.S. economy, despite the growing trade dispute between the U.S. and China. JPMorgan CEO Jamie Dimon told reporters in a call on Friday that the trade dispute "is a worry, and hopefully gets resolved," but said it's not impacting business decisions to borrow or invest yet.
Like in the first quarter, JPMorgan benefited greatly from a much lower tax bill compared to a year earlier. While pretax profits rose by $823 million, saw its tax bill drop by roughly 17 percent in the quarter compared to a year earlier. The bank's effective tax rate was 21 percent, compared with 28 percent in the prior quarter.
JPMorgan also continued to benefit from the growth of the U.S. economy and good health of the U.S. consumer. The bank grew loans and assets, and with higher interest rates, was able to charge borrowers more money. Net interest income for the bank was $13.65 billion, up 9 percent from a year earlier. This is despite the bank paying depositors more to keep their assets at the bank. Total revenue was $28.39 billion, up from $26.67 billion a year earlier.
"We see good global economic growth, particularly in the U.S., where consumer and business sentiment is high," Dimon said in the company's earnings statement.
JPMorgan's investment banking business posted an 18-percent increase in profits compared with a year earlier, helped by higher trading revenue in both stocks and fixed-income assets.
JPMorgan is part of trio of big Wall Street banks that reported their results on Friday, which also includes Citigroup and Wells Fargo. JPMorgan's results were the strongest among the three. Wells' second-quarter results were weighed down by the ongoing scandals that bank currently is dealing with, while Citi's reported results did not have as much loan growth as analysts had been expecting. Both banks shares were down noticeably on Friday.
JPMorgan shares rose 15 cents to $107 in afternoon trading. They are down roughly 1 percent this year.