“The success can last for a quarter or a two, but I think it’s still going to be a very difficult year,” Peabody said in an interview on Bloomberg Television. “I’m still expecting earnings to be down year over year.”
Credit Losses
Non-interest expenses fell 6 percent to $13.6 billion on cost cutting and lower legal bills, the bank said. That compared with analysts’ $14 billion estimate. The provision for credit losses was $1.4 billion, an increase of $467 million compared with a year earlier, JPMorgan said. The increase reflected growth in the loan portfolio, not a deterioration in credit quality, Lake said.
Earnings at the corporate and investment bank, run by Daniel Pinto, climbed 6.5 percent to $2.49 billion as revenue rose 5.1 percent from a year earlier. Markets revenue, which includes bond and stock trading, rose 23 percent. In June, Pinto said that trading revenue in the quarter was headed for a mid-teens percentage increase from a year earlier on strength in fixed income, especially rates trading. Compensation at the unit dropped 6 percent in the first six months, to $5.34 billion.
Profit from consumer and community banking, run by Gordon Smith, rose 4.9 percent to $2.66 billion on strength in mortgages. Revenue was $11.5 billion, up 4 percent from a year earlier.
“They’re looking out, saying there are some global growth concerns, but U.S. employment remains good, consumers have deleveraged,” said Shannon Stemm, an analyst at Edward Jones & Co. in St. Louis. “Credit still looks good, and until they see reason to slow down, they’ll continue to extend more of it.”