(AOF) – JPMorgan published results in decline in the third quarter after increasing its provisions to cope with the deterioration of the economic outlook. Net income fell 17% to $9.74 billion, or $3.12 per share. Analysts, however, were targeting $2.90 per share. Provisions for bad debts amounted to $1.54 billion, as the U.S. bank reversed $1.53 billion in provisions in the third quarter of 2021.
The quarter also includes net securities losses of $959 million, which resulted in a $729 million decrease in net income.
Revenue rose 10% to $33.5 billion, supported by the 34% jump in interest income to $17.6 billion. The market was for $32.12 billion.
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The negative effects of rising interest rates
The rise in interest rates normally causes an increase in bank income through the loans granted. In Europe, according to a survey conducted by S&P among 85 banking establishments, the sector expects an average increase of 18% in its net interest income. However, this new inflationary context also has undesirable effects, in particular an increase in refinancing costs. It is also accompanied by the fear of a new recession, which would then affect all the bank’s businesses, ranging from loans to asset management, whose income is correlated to market valuations. Reassuring element: the banks of the euro zone are sufficiently solid to face a deterioration of their environment.