JPMorgan Chase makes $8.3 billion profit thanks to ‘healthy’ US consumers

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Big banks are raking in monster profits

JPMorgan Chase continues to profit from a US financial system that is nonetheless buzzing alongside.

The large financial institution reported a revenue of $eight.three billion for the second quarter Friday, a rise of 18% from a yr in the past and never far off from JPMorgan’s document quarterly revenue of $eight.7 billion within the first quarter.

American banks have gotten a lift from this yr’s tax cuts.

JPMorgan CEO Jamie Dimon stated in a press release that “the wholesome US client” helped drive massive good points in its bank card and cash administration companies. Deposits grew at a strong clip as nicely.

Dimon additionally stated that JPMorgan posted document charges in its world funding banking unit within the first half of the yr, because of a growth in buying and selling income, mergers and IPOs.

“We see good world financial progress, significantly within the US, the place client and enterprise sentiment is excessive,” Dimon stated.

Dimon continued to defend Company America’s use of tax financial savings to extend dividends and purchase again extra inventory, strikes that some have criticized as serving to wealthier buyers however not common shoppers on Essential Road.

Dimon advised reporters final month that individuals who bashed buybacks have been “mainly ignorant.”

Associated: Tax lower triggers $437 billion explosion of inventory buybacks

In a response to a query about these remarks from CNNMoney throughout a convention name with reporters Friday, Dimon stated it was regular for firms to “recycle capital” and put it to higher use. He stated that finally will profit the broader financial system. Dimon identified that wages are going up and the unemployment charge goes down.

Throughout the convention name with reporters, chief monetary officer Marianne Lake added that the financial institution remains to be optimistic regardless of uncertainty surrounding tariffs and elevated commerce tensions between the USA and China, Europe, Canada and different massive world economies. Lake stated there was “no significant influence on demand” to this point for company loans.

However Dimon added that there will be “unpredictable outcomes” when there are a number of skirmishes on the commerce entrance. He stated he was hopeful that the commerce points will in the end be resolved by way of negotiations.

A commerce battle is not the one potential drawback for banks. Analysts requested Dimon and Lake a number of questions on rising rates of interest throughout one other convention name later Friday.

There have been some issues that though the Federal Reserve is elevating short-term charges, longer-term charges have barely budged these days. This so-called flattening of the yield curve could possibly be the harbinger of an financial slowdown.

However Dimon did not appear too assume this might be a giant drawback. He even predicted that long-term bond yields, significantly the 10-year Treasury, would finally begin to creep increased once more — and that is one other signal of a strong financial system.

“Charges can go up in a wholesome atmosphere,” Dimon advised analysts. “It is not all the time true that the 10-year going up is unhealthy.”

The lingering uncertainty could also be worrying buyers a bit nevertheless. Despite the fact that the financial institution’s revenue surpassed analysts’ expectations, JPMorgan’s (JPM) inventory was down barely Friday.

JPMorgan is only one of a number of massive banks to report outcomes Friday. Citigroup (C) and Pittsburgh regional banking large PNC (PNC) additionally posted earnings that topped forecasts. However scandal-plagued Wells Fargo (WFC) reported earnings that missed Wall Road’s targets.

CNNMoney (New York) First printed July 13, 2018: 7:27 AM ET

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