Investing.com – JPMorgan stock (NYSE:JPM) traded 0.6% higher Wednesday in premarket as the bank beat estimates for third-quarter earnings, even as revenue fell short of expectations.
The bank released $2.1 billion in reserves it had booked earlier in the pandemic, in response to an improving economic environment. This helped net profit rise around 24% on-year to $11.68 billion. Revenue rose a mere 1.3% to $29.64 billion.
Corporate and investment banking was the bulwark of the bank, growing its revenue by 7% on-year to $12.39 billion as the pandemic fueled mergers and acquisitions and corporate restructuring across sectors. There was a high demand for advisory services and equity underwriting as capital markets remained buoyant with large number of initial public offerings, fund-raising, share issues and buybacks.
But it wasn’t a one-way street in the division as the bank came to service in more normal times.
While investment banking and equities revenue rose, revenue from fixed income, currencies and commodities slipped 20%. Markets and securities services revenue fell 4% to $7.5 billion.
Sequentially, revenue in corporate and investment banking also fell from their second-quarter peak.
Revenue in the asset and wealth management business rose 21% to $4.3 billion, boosted by higher management fees and growth in deposit and loan balances.
Consumer and business banking revenue rose, thanks to higher deposit balances and client investment assets. But the home lending and card and auto businesses suffered. Servicing revenue in the home lending business fell while acquisition costs in the card business rose. As a result, on an overall basis, revenue in consumer and community banking business fell on-year as well as on a sequential basis.