JPMorgan posts surprise profit gain as loan book withstands turmoil
Posted October 13, 2020 7:23 a.m. EDT
CNN — JPMorgan Chase unexpectedly grew its bottom line last quarter as the bank's Wall Street business and its Main Street arm withstood turmoil in the global economy.
The nation's largest bank blew away expectations by reporting a profit of $9.4 billion during the third quarter, up 4% from the year before. Per-share profit jumped to $2.92, easily topping estimates.
JPMorgan's big beat was driven by strong trading and investment banking performance as well as far fewer credit losses than feared.
During the first half of the year, JPMorgan braced for defaults and bankruptcies by ramping up loan-loss reserves by a staggering $19 billion.
In a positive sign, JPMorgan CEO Jamie Dimon said the bank decided in the third quarter to maintain its credit reserves at $34 billion "given significant economic uncertainty and a broad range of potential outcomes."
JPMorgan's revenue dipped 11%, but that also was better than feared.
The pandemic has slammed the banking industry -- JPMorgan included. The bank has lost about a quarter of its value so far this year. JPMorgan's $308 billion market valuation is now dwarfed by those of Tesla and Nvidia.
But JPMorgan has weathered the storm better than some of its rivals.
Citigroup's share price is down more than 40% on the year and the bank recently announced the surprise retirement of CEO Michael Corbat. Wells Fargo has lost more than half of its value this year and the money-losing bank recently cut its dividend for the first time since the Great Recession.