JPMorgan Chase & Co. NYSE: JPM) stock rises on solid consumer banking operations

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JPMorgan Chase & Co. (NYSE: JPM) stock rose over 4.1% on 15th October, 2019 (As of 12:53 pm GMT-4; Source: Google finance) after the company posted better than expected results for the third quarter of FY 19 on the back of the strength of consumer banking operations that helped the bank mitigate the impact of lower interest rates. The bank has reported the net income for the quarter ended Sept. 30 was US$9.08 billion compared with US$8.38 billion, a year ago.

JPM in the third quarter of FY 19 has reported the adjusted earnings per share of $2.68, beating the analysts’ estimates for the adjusted earnings per share of $2.45, according to the analysts surveyed by Refinitiv. The company had reported the adjusted revenue growth of 8 percent to $30.1 billion in the third quarter of FY 19, beating the analysts’ estimates for revenue of $28.5 billion. The bank posted $14.4 billion in third-quarter net interest income, which exceeded the estimate of Morgan Stanley’s Betsy Graseck by almost $300 million

Moreover, JPM’s net interest income rose 2% to $14.4 billion, mainly due to the continued balance sheet growth and mix, largely offset by the impact of rates. Noninterest revenue was $15.7 billion, up by 14%, and included approximately $350 million of gains related to loan sales in Home Lending. Excluding these gains, the increase in noninterest revenue was mainly due to the results in Fixed Income Markets in the Corporate & Investment Bank as well as Home Lending and Auto in Consumer & Community Banking.

During the third quarter, Consumer & Business Banking net revenue rose 5% to $6.7 billion, mainly due to higher net interest income on the back of the growth in deposit balances and margin expansion, as well as higher noninterest revenue on higher transaction volumes. Home Lending net revenue rose 12% to $1.5 billion on the back of higher net production revenue, which was mainly offset by lower net interest income on lower loan balances. Card, Merchant Services & Auto net revenue grew 9% to $6.1 billion, due to higher Card net interest income on loan growth and margin expansion, and higher auto lease volumes.

Further, Investment Banking revenue grew 8% to $1.9 billion during the third quarter mainly due to higher debt and equity underwriting fees, which was partially offset by lower advisory fees, and reflected wallet share gains across products. Treasury Services revenue fell 7% to $1.1 billion, with deposit margin compression partially offset by fee growth and higher balances.

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