NEW YORK, July 17 (AFP): JPMorgan Chase reported record quarterly profits on Tuesday behind strong consumer businesses on a day of mixed bank earnings that underscored the sector's vulnerability to lower Federal Reserve interest rates.
Wells Fargo also notched higher profits, while Goldman Sachs reported a dip in earnings but still topped analyst expectations.
The trio of bank results moved markets into the heart of second-quarter earnings season, which comes against a backdrop of uncertainty over international trade and an anticipated easing of monetary policy, with the Fed expected to cut interest rates later this month.
Bank profits have been boosted the last few years from a series of interest rate hikes. But the Fed has pivoted away from that stance amid concerns about a weakening manufacturing sector, sluggish inflation and the impact of trade conflicts on the economy.
Lower interest rates are generally viewed as a drag for large banks because it reduces the net interest income - 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, the credit card business and higher auto loans and lease originations.
Net profit came in at $9.7 billion, up 16.1 percent and a company record.
Revenues were up 4.1 percent to $29.6 billion.
Chief executive Jamie Dimon said uncertainty about issues such as trade and monetary policy is "a constant" while geopolitical tensions "may be a little bit higher now than normal," but added that "the consumer in the United States is doing fine" and economic conditions are solid in other key markets.
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