JPMorgan posts higher profit; shares dip on net interest income view

(JPM.N) said on Friday a higher-than-expected quarterly profit due to strong loan growth and higher interest rates, but the year’s net interest margin would be lower than what it expected to be. It was expected, sending its share of around 2 percent.

Bank lending operations were increased in residential mortgages, commercial loans, credit cards and even car loans, an area where some lenders have restarted.

However, in a call with analysts, chief financial officer Marianne Lake said the brokerage margin for full year increase by 4 billion, instead of an estimate of 4.5 trillion give April.

This is due to mortgage adjustments and a change in the alignment of interest rates, Lake said.

Overall, JPMorgan’s net profit increased 13% to $ 7.03 billion, or $ 1.82 a share, from $ 6.2 billion, or $ 1.55 a share, in the same quarter last year. (Bit.ly/2tQ630n)

This was driven by average loans based on JP Morgan’s book, which increased 8 percent in the second quarter compared to the same period a year earlier. Higher interest rates have helped JPMorgan to make more money on these loans.

Excluding a gain from a legal agreement, the bank earned $ 1.71 per share, surpassing analysts’ average estimate of $ 1.58, according to Thomson Reuters I / B / E / S.

The stock fell 1.7 percent to $ 91.55 in morning trading.

The Federal Reserve has raised interest rates for the second time this year in June. Raising rates are generally good for banks, allowing them to increase the amount they charge for the loans faster that stimulate the amount they pay for deposits.

Finance chief Marianne Lake called rate moves “a two-city tale” in which Wall Street firms are rapidly changing, but Main Street customers do not demand more money for their deposits.

“Although there have been changes in the industry and the CD, there is nothing in the control or savings bank,” Lake said.

The bank expects the Federal Reserve to raise the rate again in December, he said.

As JPMorgan’s loan book has increased, it has also earmarked more money to borrowers who do not pay their debts.

On credit cards, where it grew aggressively, the bank has incorporated reserves for loan losses of $ 252 million, while the repayment rate has exceeded 3 percent, an increase over prior periods of the year previous.

JPMorgan executives have told investors to expect credit card loss rates to increase when the company makes more loans.

In more recent card accounts, the bank sees loading speeds of about 4.5 percent, Gordon Smith, chief consumer banking, said at an investor conference in June.

Trading income was a dark patch on JPMorgan as volatility reached multi-year levels for several years. But leaders across Wall Street have focused on reducing investors to look for because last year’s quarter benefited from an increase in trade around the UK voting Brexit.

Revenues from JPMorgan markets fell 14 percent to 3.22 billion, mainly due to the fixed rate of trading. It was the first fall in five quarters.

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