JPMorgan Chase said first-quarter profit rose faster than expected, as the largest U.S. bank used a lower-than-expected tax rate, expense controls and growth in credit-card loans to overcome a slump in bond- and stock-trading.
Net income rose by 5% from a year earlier to $9.18 billion, or $2.65 a share, New York-based JPMorgan said Friday in a statement. Analysts surveyed by FactSet had estimated the figure at $2.35.
JPMorgan was the first big U.S. bank to post results for the quarter, a period in which the U.S. government shut down for 35 days, the longest period in American history, and concerns mounted among many economists that growth is slowing both in the U.S. and globally.
The stimulus is fading from President Donald Trump’s late-2017 tax cuts, and Federal Reserve officials this year have become so worried about markets and the economy that they recently paused their effort to boost official U.S. interest rates. Yet the U.S. unemployment rate, which typically leads to more bad loans for banks like JPMorgan, remains close to the lowest in a half-century.
“Even amid some global geopolitical uncertainty, the U.S. economy continues to grow, employment and wages are going up, inflation is moderate, financial markets are healthy and consumer and business confidence remains strong,” CEO Jamie Dimon said in the statement.
The tax cuts led to a windfall for the banks in 2018, but the big banks lack a similar catalyst this year.
Still, JPMorgan managed to push its effective corporate tax rate in the first quarter down to 18.3%, down from the 20.1% effective rate used in the fourth quarter.
So the bank’s corporate income taxes totaled $2.05 billion in the first quarter, less than the $2.55 billion projected prior to the results’ release by Brian Kleinhanzl, an analyst at Keefe, Bruyette & Woods.
Read more: https://www.thestreet.com/markets/jpmorgan-tops-earnings-estimates-even-as-trading-revenue-tumbles-14925224