JP Morgan is set to report third-quarter earnings — here's what the Street expects

J. P. Morgan Chase is scheduled to report third-quarter earnings before the opening bell Friday.

Here’s what Wall Street expects:

  • Earnings: $2.25 per share, a 28 percent increase from a year earlier, according to Refinitiv.
  • Revenue: $27.5 billion, a 4.9 percent increase from a year earlier.
  • Net Interest Margin: 2.5 percent.
  • Trading Revenue: $4.39 billion (Equities $1.43 billion, Fixed Income $2.96 billion), according to FactSet.

J. P. Morgan Chase, the biggest U.S. bank by assets, is the first major lender to report earnings. The company is closely watched by investors looking for clues into how the industry’s Wall Street and Main Street businesses fared in the quarter.

Bank stocks have been pummeled recently as surging U.S. interest rates stoke worries that the industry’s profitability has peaked. While rising rates typically helps lenders early in the cycle, eventually competition for deposits forces banks to pay higher interest rates, shrinking margins. Sluggish loan growth could also hamper interest income, which is one of the main ways lenders make money.

Furthermore, J. P. Morgan said last month that trading revenue was headed for a mid-single-digit decline and that fees from investment banking will be about flat from a year earlier.

The KBW Bank Index has dropped 5.8 percent since last Friday, and shares of several banks including Wells Fargo and Goldman Sachs have fallen more than 20 percent from recent highs. J.P. Morgan has fared better at about 9 percent below its high-water mark.

Still, the bank is making long-term bets on the U.S. economy. Last month Chief Executive Officer Jamie Dimon pledged $500 million for a new program called AdvancingCities to boost opportunities for people who have been left behind by economic growth. It also said it was opening 50 new branches in the Philadelphia area, part of a broader plan to use its corporate tax cut windfall to open 400 branches to deepen its retail reach.

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