Big banks earn more in the third quarter as chiefs name rate risks

What happened

JPMorgan Chase, Wells Fargo and Goldman Sachs filed their third-quarter results with the SEC early on Tuesday 13 October, and all three reported higher profits than a year earlier. ^{[1, 2, 3, 4, 6, 7]}

JPMorgan's net income was $15.3 billion, up 6 percent from $14.4 billion, on reported net revenue of $50.2 billion, up 8 percent from $46.4 billion. The bank listed $658 million of net losses on investment securities as a significant item in the quarter. Its net charge-offs, loans written off as lost, were $2.2 billion, down $389 million. ^{[1, 2]}

Wells Fargo's net income was $5.95 billion, up from $5.59 billion a year earlier. Its total revenue was $21.87 billion, 2 percent higher than $21.44 billion, the bank reported. ^[3]

Goldman Sachs reported net earnings of $5.29 billion, up from $4.10 billion a year earlier. Its net revenues were $18.68 billion, 23 percent higher than a year earlier, the firm reported. ^[6]

Why it matters

The provision for credit losses, money set aside for loans that may not be repaid, was lower than a year earlier at JPMorgan and higher at the other two. JPMorgan's was $2.7 billion, down from $3.4 billion; Wells Fargo's was $1.03 billion, up from $681 million; Goldman's was $368 million, up from $339 million. Wells Fargo tied its larger allowance to more commercial and auto lending, and Goldman said its provision reflected impairments on wholesale loans. ^{[1, 3, 6]}

What the chiefs said

Jamie Dimon, chairman and chief executive of JPMorgan, said 'large fiscal deficits, sticky inflation, elevated asset prices, rising interest rates and geopolitical conditions continue to shift under the surface.' He added: 'These forces may be manageable, but we remain prepared for a wide range of outcomes.' ^{[1, 5]}

Charlie Scharf, chairman and chief executive of Wells Fargo, said 'higher interest rates, higher oil prices and persistent inflation create risks to the economy.' He said 'strong positive forces such as the investment in AI infrastructure, high employment levels and consistent wage growth continue to outweigh the risks.' Goldman's release carried no statement from its chief executive. ^{[3, 6]}

Yahoo Finance reported that revenue from JPMorgan's trading and dealmaking businesses was lower than in a standout second quarter. Against a year earlier, the release puts markets revenue at $10.3 billion, up 15 percent, and investment banking fees up 14 percent. ^{[1, 5]}

What settles it next

JPMorgan scheduled its call on the results for 8:30 a.m. New York time on Tuesday 13 October, Goldman Sachs for 9:30 a.m. and Wells Fargo for 10:00 a.m. on the same day. Wells Fargo called its figures preliminary: final results come in its quarterly report on Form 10-Q and may differ. ^{[1, 3, 7]}

Who it reaches

JPMorgan Chase (JPM), Wells Fargo (WFC) and Goldman Sachs (GS) are each direct: the figures are from each bank's own release, filed with the SEC. ^{[1, 3, 6]}