JPMorgan Chase jumps to record revenue on consumer banking gains

Dive Brief:

JPMorgan Chase reported profit of $9.08 billion and record revenue of $29.34 billion for the quarter ending Sept. 30, boosted by the strong performance of the bank's consumer banking unit.
The bank's third-quarter profit represents an 8% jump from the $8.38 billion reported in last year's comparable quarter. Profit for the bank's consumer unit, which includes home loan, auto and consumer credit cards, rose 5% to $4.27 billion, while profit at the bank's corporate and investment side rose 7% to $2.81 billion.
For the first time in the bank's history, JPMorgan shares closed above $120 in September, according to The Wall Street Journal.

Dive Insight:

The nation's largest bank continues to perform well, posting year-over-year profit gains for each of the past seven quarters, according to the Journal.

Rising interest rates that had increased profitability on lending operations contributed to JPMorgan's gains in the past seven quarters.

The Federal Reserve initiated several rate cuts this summer, and JPMorgan's interest expense was up 25% from a year ago. However, JPMorgan's net interest income rose 2% to $14.23 billion this quarter.

"JPMorgan has set a pace for bank earnings this quarter that will be very difficult for other banks to match, and it is likely that JPMorgan will be the star performer in the batch of bank earnings in the coming days," Octavio Marenzi, CEO of research firm Opimas told CNBC.

During the bank's earnings call Tuesday, JPMorgan CFO Jennifer Piepszak attributed the bank's strong performance in part to the strength of the U.S. economy and the health of the U.S. consumer.

"The U.S. economy is on solid footing. And while global growth is slowing, the U.S. consumer remains healthy," she said. "Despite continued macro uncertainty and headwinds from the rate environment, this quarter showcases the diversification and scale of our business model. We remain well positioned to outperform in any environment and will continue to strategically invest in our businesses."

JPMorgan Chase CEO Jamie Dimon noted the bank's technology investments, particularly in its data centers.

"We're building brand-new data centers as we speak," Dimon said when asked about the bank's nearly $12 billion technology budget. "We have to build that infrastructure out to be the best in the world, so we're not going to ever skimp on something like that."

JPMorgan's commercial unit reported profit of $937 million during the quarter, down 14%, and its asset management operations earned $668 million, a drop of 8%.