NEW YORK—JPMorgan Chase, the largest U.S. bank by assets, on Tuesday reported a third-quarter profit after booking a loss in the same period a year ago, when the company absorbed a big charge for legal expenses.
The bank reported earnings of $5.6 billion, or $1.36 share, compared with a loss of $380 million, or 17 cents a share, in the same period a year ago. Revenue for the period rose 5 percent to $24.25 billion from $23.12 billion a year ago.
Despite returning to profit, the bank’s earnings fell short of analyst’s expectations.
The bank set aside a further $1 billion to cover more legal costs. JPMorgan and other banks are facing allegations that they manipulated foreign-exchange rates to the detriment of their clients. The money will help cover some of the resulting legal costs. Last year the charge for litigation costs amounted to $9.2 billion.
Jamie Dimon, JPMorgan’s CEO, said that a slowing global economy will impact some of JPMorgan’s businesses such as trading and investment banking. Other areas though, such as its retail and credit card business, which are more focused on the U.S., would likely be unaffected.
“You’re still going to have growth in America, which is a very good thing,” Dimon said, on a call with reporters.
Tuesday’s results missed the expectations of Wall Street analysts who had forecast earnings of $1.38 a share, according to FactSet. JPMorgan’s stock price fell 20 cents, or 0.3 percent, to $57.96.
Citigroup and Wells Fargo also reported third-quarter earnings on Tuesday.
Citi reported earnings of $3.44 billion, or $1.07 a share, for the three-month period ending in Sept. 30. Stripping out one-time items, Citi said it earned an adjusted profit of $3.67 billion, or $1.15 a share. The results exceeded Wall Street expectations. The average estimate of analysts surveyed by FactSet was for earnings of $1.12 a share.
The bank also announced that it would bow out of the retail banking business in 11 markets as part of its ongoing effort to restructure and slim down since the financial crisis.
Wells Fargo, which is based in San Francisco, said it had third-quarter earnings $5.73 billion, equivalent to $1.02 per share. The results were in line with analysts’ expectations.
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CEO Says More to Be Done on Cyberattacks
JPMorgan Chase’s CEO Jamie Dimon says that more coordination between businesses and government is needed to combat the rising threat of cyberattacks.
New York-based JPMorgan said earlier this month that a breach of its computer systems this summer compromised customer information pertaining to roughly 76 million households and 7 million small businesses. Among the customer data stolen were names, addresses, phone numbers and email addresses.
A growing number of financial firms and major retailers have revealed their customer’s data has been stolen. Sears said Friday that a data breach at its Kmart stores that started last month may have compromised some customers’ credit and debit cards, and Target and Home Depot have also been the victims of cyberattacks.
While Dimon said that the coordination between his bank, law enforcement agencies and other financial institutions has been good so far, it would likely need to improve as the threats escalate. Dimon said that JPMorgan had warned other banks about the attacks that it was experiencing to help them prevent breaches on their own systems.
“Cyber is a big deal,” Dimon said on a call with reporters on Tuesday. “It’s going to be an ongoing battle, and unfortunately battles will be lost.”
JPMorgan is currently spending about $250 million a year on cyber security, and employs about 1,000 people in the area, according to Chief Financial Officer Marianne Lake. The bank expects that those costs will rise next year and beyond as the attacks evolve and become more sophisticated.
Dimon was speaking on a conference call after the company reported its third-quarter earnings. He also told reporters that the prognosis on his health was “excellent” after he had undergone treatment for throat cancer. “I feel good and am happy that the treatments are over.”
From The Associated Press
