JPMorgan’s profit surges on investment banking
NEW YORK – A surge in investment banking pushed up JPMorgan’s second-quarter profit even as results at its consumer business sagged.
JPMorgan earned a bonanza in fees from underwriting stock and bond offerings in the first three months of the year as financial markets thrived. The gain offset a slight decline at the bank’s consumer business, which struggled with lower mortgage fees.
The bank made $6.1 billion in the second quarter after stripping out payments to preferred shareholders. That was up 32 percent from the same period a year ago, when it made $4.6 billion. Profits in the year-ago period were affected by a trading loss.
JPMorgan and other banks have benefited from the Federal Reserve’s easy-money policies, which have encouraged corporations to borrow money and consumers to refinance mortgages. While rates have been going higher in recent weeks as investors anticipate the Fed’s eventual exit from economic stimulus, JPMorgan’s CEO Jamie Dimon said that wasn’t a cause for worry.
“All things being equal, rates going up is a good thing, as long as the economy keeps growing,” Dimon said in an interview on CNBC.
If anything, rising rates should boost JPMorgan’s profits, said Shannon Stemm, financial services analyst for Edward Jones, a wealth adviser. As the economy strengthens, not only would demand for loans increase, the loans would also be made at higher rates.