NEW YORK – JPMorgan Chase & Co. said Friday that its third-quarter profits rose by 24 percent from a year ago, helped by a lower tax bill and higher interest rates, which allowed it to charge more for loans to consumers and businesses alike.
The New York-based bank said it earned $8.38 billion in the third quarter, or $2.34 a share. That’s up from $6.73 billion, or $1.76 a share, in the same period a year earlier. The results beat the expectations of analysts, who were looking for JPMorgan to earn $2.26 a share, according to FactSet.
“The U.S. and the global economy continue to show strength, despite increasing economic and geopolitical uncertainties, which at some point in the future may have negative effects on the economy,” Jamie Dimon, JPMorgan’s chief executive and chairman, said in a statement.
The bank reported a 6 percent rise in its core loan portfolio and a 12 percent increase in credit card sales volume.
Investors will carefully analyze results from JPMorgan and other big banks Friday. The U.S. stock market is coming off its worst two-day performance since February, and investors want to see evidence that corporate profits remain strong.
JPMorgan Chase’s shares were up 1.3 percent in pre-market trading. The stock is up 1.1 percent this year after dropping more than 6 percent during the market’s downturn this week.
Like many banks, JPMorgan has benefited greatly from the rise in interest rates in the past couple of years. The bank’s net interest income -- revenue from customers’ loan payments minus what it pays depositors -- rose by 9 percent from a year earlier.
While the bank has to pay more interest to depositors, it is more than able to make up for those higher costs by charging more to borrowers.
The bank also continues to benefit greatly from the Republican-passed tax law. Its effective tax rate was 21.6 percent in the quarter, down from 29.6 percent a year earlier. While the bank’s profits before income taxes rose by more than a billion dollars, the money it paid in income taxes last quarter fell by $500 million compared to a year earlier.
Firm-wide, JPMorgan’s quarterly revenue was $27.82 billion, up from $26.45 billion a year earlier.