JP Morgan reports lower earnings than expected
- Credit: PA
US banking giant JP Morgan reported lower-than-expected earnings in a disappointing start to the third quarter bank reporting season.
Figures posted overnight after US markets closed showed a 22pc rise in underlying profits to 6.8 billion US dollars (£4.5bn), but the figure missed market forecasts as revenue declined across its commercial and consumer banking business.
Turmoil on stock markets over the summer, falling commodity prices and a slowing US housing market hit the bank's figures in the three months to the end of September, while it faced another hefty litigation bill of around 1.3 billion US dollars (£851m).
Cost cutting measures, including job losses, were not enough to offset sliding revenues, which sunk 10pc in its corporate and investment bank.
Its consumer business - its largest division - saw revenues fall 4pc due largely to poor mortgage returns, although it lifted earnings by 4pc.
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Overall group wider third quarter revenues fell 6pc to 23.5 billion US dollars (£15.bn).
The results also showed that pay and bonuses set aside for staff in the third quarter fell 7pc year-on-year to 7.3 billion US dollars (£4.8bn).
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Chief executive Jamie Dimon said: 'We saw the impact of a challenging global environment and continued low rates reflected in the wholesale businesses' results.'
JP Morgan has been leading a swingeing cost cutting programme in its Chase consumer bank, with jobs axed and branches closed.
The consumer bank's workforce has fallen by around 10,000 so far this year.
JP Morgan is the first of the US banks to report, followed by Bank of America later on Wednesday and Goldman Sachs and Citigroup on Thursday.