JPMorgan Chase (JPM 96.96, +0.12) is higher by 0.1% after beating expectations for the third quarter.
The banking giant reported above-consensus third quarter earnings of $1.76 per share on a 2.6% year-over-year increase in revenue to $25.33 billion, which also exceeded expectations.
Average core loans increased 7.0% year-over-year firmwide while core loans in Corporate Client Banking increased 8.0%. Corporate Client Banking average deposits increased 9.0% to $646 billion.
The bank reported a Tier 1 capital ratio of 12.5%, up from 11.9% one year ago and unchanged from 12.5% in the previous quarter.
Adjusted overhead ratio decreased to 55.0% from 56.0% in the previous quarter. One year ago, the adjusted overhead ratio stood at 57.0%. Adjusted expense decreased to $14.40 billion from $14.50 billion.
Net interest income grew 10.0% year-over-year to $13.10 billion. The increase took place due to rising rates and loan growth. This was partially offset by lower Markets net interest income. Noninterest revenue declined 4.0% to $13.10 billion due to lower Markets revenue.
In the Consumer & Community Banking segment, Consumer & Business Banking revenue increased 14.6% year-over-year to $5.41 billion due to higher deposit margins and strong deposit growth. Mortgage Banking revenue declined 17.0% to $1.60 billion, due to lower net servicing revenue, loan spread compression, and lower production margins. Card, Commerce Solutions & Auto revenue increased 7.0% to $5.10 billion. Higher auto lease volumes and net interest income on higher card balances were partially offset by higher origination costs for new Card accounts.
Provision for credit losses increased by $223 million to $1.50 billion. Higher net charge-offs from the Card segment were partially offset by lower charge-offs in Mortgage.
In the Corporate & Investment Bank segment, net revenue fell 9.2% to $8.59 billion, mostly due to a 15.6% decline in Markets & Investor Services revenue (to $5.50 billion). Noninterest expense fell 3.4% to $4.77 billion while Banking revenue grew 5.2% to $3.09 billion.
JPMorgan Chase reaffirmed most of its expectations for the full year. The company expects that net interest income will have increased about $4 billion year-over-year. Adjusted expense for 2017 is expected to be roughly $58 billion while average core loans are expected to grow 8.0% for the year. The company expects that net charge-offs will total roughly $5 billion for the full year after previous expectations called for charge-offs between $4 billion and $6 billion.