High interest rates drive profits investment bank JPMorgan

- Advertisement -spot_imgspot_img

In the first quarter of this year, the profit of the American investment bank JPMorgan Chase & Co rose sharply. This is partly due to the higher interest rates. Profits rose 52 percent to more than $12 billion.

The banking sector has been rocked by several bankruptcies in recent months. Despite the banking crisis, the largest US lender is proving resilient. The performance underscores how large banks are weathering the crisis, in part because regulators have tightened rules for banks since 2008.

Banks are becoming more conservative

CEO Jamie Dimon does warn that the banking crisis could cause lenders to become more conservative, which in turn could have an effect on consumer spending. “The storm clouds we’ve been tracking over the past year are still on the horizon and the turmoil in the banking sector is adding to these risks,” he said.

JPMorgan Chase set aside as much as $2.3 billion to absorb any loan losses related to the uncertain economy. CEO Jamie Dimon said in a statement that the US economy is in good shape, but that there are uncertainties. The recent banking turmoil has increased those risks. Incidentally, Dimon had recently stated that the banking crisis seems to be over.

Revenue

Revenue on the consumer lending side was up 80 percent to $5.2 billion. This is mainly due to the higher interest rates. The Federal Reserve, the US central bank, raised interest rates by a quarter of a percentage point last month. The higher interest yielded the bank more than twenty billion dollars.

In contrast, JPMorgan’s investment activities were disappointing. Income from stock trading fell by 12 percent.

Wells Fargo

Industry peer Wells Fargo, a large mortgage lender, posted a profit of $ 5 billion. That is 32 percent more than a year earlier. Wells Fargo also benefited from rising interest rates in the US. Citigroup, also a large bank in the US, posted a quarterly profit of $ 4.6 billion, which is 7 percent more on an annual basis.

Partly as a result of the higher interest rates, the American investment bank JPMorgan achieved more than 50 percent more profit.
Partly as a result of the higher interest rates, the American investment bank JPMorgan achieved more than 50 percent more profit. (ANP/SIPA USA)

- Advertisement -spot_imgspot_img
Latest news
- Advertisement -spot_img
Related news
- Advertisement -spot_img