JPMorgan Chase reported its first quarterly profit miss in nearly three years on October 13, as market volatility, economic uncertainty and slowing dealmaking weighed on its investment banking and trading businesses. The banking giant posted earnings of $5.57 per share for the third quarter ended September 30, below analysts’ average estimate of $5.85, according to LSEG data. Investment banking fees declined 8% from the previous quarter, although they remained 14% higher than a year earlier, reflecting continued client activity despite a slowdown in market conditions.
The bank’s markets division recorded a 15% year-on-year revenue increase, driven by a 49% surge in equity markets revenue as investors adjusted portfolios amid uncertainty surrounding global interest rates and rising energy prices. However, fixed-income trading revenue fell 4%, while weaker-than-expected equity and debt underwriting performance added pressure. The initial public offering (IPO) market has also lost momentum in recent weeks following a strong start to the year, raising concerns about investment banking revenues. JPMorgan CEO Jamie Dimon said client activity remained strong, although it moderated somewhat during the quarter. Despite the earnings shortfall, the bank’s shares recovered from early premarket losses and were last up 0.8%.
Consumer banking continued to support the bank’s performance, with net interest income excluding markets rising 6% to $24.7 billion, while average loans increased 10% year-on-year. Dimon attributed the resilience of the US economy to strong business investment and sustained consumer spending. JPMorgan expects full-year net interest income of approximately $106.2 billion, including markets, and $97.2 billion excluding markets. The bank also projected preliminary net interest income of around $107 billion, excluding markets, for 2027. However, rising bond yields and the prospect of further Federal Reserve interest-rate increases could raise borrowing costs, potentially slowing loan demand and placing additional pressure on the banking sector.
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