[BENGALURU / NEW YORK] JPMorgan Chase raised its full-year forecast for net interest income (NII) on Tuesday (Oct 14), after strong performance in its trading and investment banking businesses helped it beat expectations for third-quarter profit.
Economic resilience despite tariff war risks and hopes of US interest rate cuts have prompted companies to strike big deals and consider stock offerings, lifting investment banking business across Wall Street, with dealmakers expecting an even stronger 2026.
“While there have been some signs of a softening, particularly in job growth, the US economy generally remained resilient,” chief executive officer Jamie Dimon said in a statement.
“However, there continues to be a heightened degree of uncertainty stemming from complex geopolitical conditions, tariffs and trade uncertainty, elevated asset prices and the risk of sticky inflation,” he added.
The bank’s traders capitalised on portfolio repositioning by their clients as equity markets hit record levels during the quarter.
Revenue from the markets division, which includes both equities and fixed-income trading, rose 25 per cent to US$8.9 billion to a third-quarter record, far surpassing an earlier estimate.
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NII boost
Large banks such as JPMorgan Chase and Bank of America can help feel the pulse of the US economy by offering insights into consumer spending, borrowing and business activity.
NII, or the difference between what banks earn on loans and pay out on deposits, continues to prop up industry earnings.
JPMorgan revised its interest income forecast for the year. It now expects NII of roughly US$95.8 billion for 2025, compared with an earlier estimate of US$95.5 billion. It had raised its forecast in July as well.
Analysts, on average, had expected US$95.4 billion, according to estimates compiled by LSEG.
Industry executives have said consumers remain in good financial shape, helped by a strong labour market and rising wages. That has also meant regular debt payments and steady demand for new loans.
At JPMorgan, NII rose 2 per cent in the third quarter to US$24.1 billion. Meanwhile, for the fourth quarter, it expects its interest income to be US$23.5 billion, excluding markets.
It expects interest income, excluding markets, of US$95 billion in 2026, driven by balance sheet growth and partially offset by the impact of lower rates.
It reported a profit of US$5.07 per share for the latest quarter, comfortably beating analysts’ estimates of US$4.84 per share.
Rival Wells Fargo also beat Wall Street estimates for third-quarter profit on Tuesday.
Wall Street operations shine
Corporate dealmaking has picked up sharply this year after a brief slowdown in April as corporates look to take advantage of a booming stock market.
Investment banking fees at JPMorgan rose 16 per cent in the third quarter. Meanwhile, trading revenue also soared at a time when economic uncertainty remains.
JPMorgan collected the most investment banking fees among its rivals so far this year, according to analytics firm Dealogic.
Stocks hit all-time highs during the quarter, lifted by optimism around US interest rate cuts and strong corporate earnings from top technology companies.
Revenue from equities business jumped 33 per cent to US$3.3 billion in the third quarter, while that from fixed income surged 21 per cent to US$5.6 billion, largely driven by higher revenue in rates, credit and the securitised products.
Looking ahead, uncertainty about interest rates and the ongoing US government shutdown could reignite market volatility, benefiting Wall Street trading desks.
As the government shutdown delays the release of key economic indicators, investors will focus on remarks from CEOs of major companies, including Dimon, for their insight on the economy.
Earlier this week, JPMorgan announced plans to hire bankers and invest up to US$10 billion in US companies critical to national security and economic resilience as part of a broader US$1.5 trillion pledge.
The bank’s overall revenue rose 9 per cent to US$47.1 billion in the quarter.
Shares of JPMorgan were little changed in volatile trading before the bell. REUTERS
