Higher interest rates helped the bank’s customer business in the first quarter, which caused sales to go up.
This week, JPMorgan Chase reported earnings for the first quarter that was higher than what experts had expected. This was because net interest income went up by almost 50% because interest rates went up.
In the first three months of the year, the Wall Street bank made a profit of $12.6 billion, or $4.10 per share. This is up from $8.3 billion, or $2.63 per share, at the same time last year, which is a gain of 52%.
The US Federal Reserve’s most aggressive rate-hiking effort in decades led to a sharp rise in net interest income, which pushed company-wide sales up by 25% to $39.34 billion. The bank’s net interest income, which shows how much it makes from loans, went up by 49% to $20.8 billion.
Because interest rates went up, the bank’s customer and community banking unit made 80% more money, or $5.2 billion, than it did before.
Jamie Dimon, the CEO of JPMorgan, said that the US consumer and economy as a whole are still doing well, but he warned that the banking problem could make lenders more cautious, which could affect how much people spend.
“The storm clouds we’ve been watching for the past year are still on the horizon, and the turmoil in the banking industry adds to these risks,” he said, adding that banks will probably cut back on loans as they become more cautious in preparation for a possible economic downturn.
With $3.67 trillion in assets, JPMorgan is the biggest bank in the US. Its savings went from $2.34 trillion in the fourth quarter of last year to $2.38 trillion in the first quarter. Analysts say that JPMorgan got a lot of deposits from people who wanted to move their money to a bigger bank after Silicon Valley Bank and Signature Bank went bankrupt within days of each other in early March because of huge runs on accounts.
The First Republic, a troubled third lender, was saved in large part by JPMorgan, which helped lead attempts to give it $30 billion in deposits.