Mixed earnings at large US banks

NEW YORK, July 16 (AFP): JPMorgan Chase reported record quarterly profits on Tuesday behind strong consumer business, but shares were pressured by worries over expected Federal Reserve interest rate cuts on a day of mixed results by large banks.

Wells Fargo also notched higher profits, while Goldman Sachs reported a dip in profits, but topped analyst expectations.

The trio of results moved markets into the heart of second-quarter earnings season, which comes against a backdrop of uncertainty over international trade and an anticipated loosening of monetary policy, with the Fed expected to cut interest rates later this month.

Lower interest rates are generally viewed as a drag for large banks because it reduces the net interest income of financial companies-the difference between the interest rates it charges consumers for loans and the interest it must pay for deposits.

At JPMorgan, key areas of strength included consumer banking, where it scored from higher net interest income. JPMorgan also generated increased revenues connected to the credit card business and higher auto loans and lease originations.

Net profit came in at $9.7 billion, up 16.1 per cent and a company record.

Revenues were up 4.1 per cent to $29.6 billion.

Chief executive Jamie Dimon offered an upbeat appraisal of the US economy.

"We continue to see positive momentum with the US consumer - healthy confidence levels, solid job creation and rising wages - which are reflected in our Consumer & Community Banking results," he said.

But shares were choppy after the report, with analysts pointing to the bank's forecast for $57.5 billion in 2019 net interest income, down from the prior $58 billion forecast. The decline reflects the expected hit from Fed actions to cut rates.

JPMorgan Chase reported a jump in second-quarter profits on Tuesday behind strength in consumer and business banking as its CEO offered an upbeat appraisal of US economic trends.

At Wells Fargo, net income rose 19.7 per cent to $6.2 billion, while revenues were essentially flat at $21.6 billion.

Wells Fargo experienced a dip in net interest income but that was largely offset by other gains, such as higher service charges on deposit accounts and lower non-interest expenses.