JPMorgan Chase (NYSE:JPM) outperformed analysts’ Q3 profit and revenue estimates, driven by higher interest income and lower credit costs. Key figures from the report:

Earnings: $4.33 per share

Revenue: $40.69 billion (surpassing the $39.63 billion estimate from LSEG)

The bank reported a 35% increase in profit, reaching $13.15 billion, or $4.33 per share, factoring in 17 cents for securities losses and 22 cents for legal expenses. The precise components of LSEG’s $3.96 per share profit estimate remain unclear.

Revenue climbed by 21% to $40.69 billion, largely due to strong net interest income, which reached $22.9 billion, surpassing expectations by approximately $600 million. Simultaneously, credit provisioning was notably lower, at $1.38 billion, compared to the estimated $2.39 billion.

JPMorgan’s retail banking division saw a 36% profit increase to $5.9 billion, primarily due to higher net interest income and the acquisition of First Republic. However, its corporate and investment bank experienced a 12% profit decline to $3.1 billion, largely attributed to decreases in trading and advisory revenue.

JPMorgan’s stock rose by 3.2% during morning trading, tempering earlier gains of nearly 5%.

CEO Jamie Dimon acknowledged that the bank was “over-earning” from net interest income and benefiting from “below-normal” credit costs, both of which are expected to normalize over time. He warned that tight labor markets, high government debt levels, and rising interest rates could pose challenges.

Dimon expressed concerns about the global landscape, citing the war in Ukraine and recent attacks on Israel as potential threats to energy and food markets, global trade, and geopolitical relationships. He emphasized the need to prepare for various outcomes.

This report comes after a period of uncertainty for U.S. banks, with the Federal Reserve signaling its intention to keep interest rates higher for a prolonged period to combat inflation and amid robust economic growth.

JPMorgan, in contrast to some smaller competitors, continued to benefit from the rate environment. The bank raised its net interest income guidance to $88.5 billion for the year, up from the $87 billion forecasted in July, marking the fourth time the guidance has been increased this year.

During a conference call, Dimon and CFO Jeremy Barnum criticized U.S. regulators’ plans to raise capital levels for banks with over $100 billion in assets, expressing concerns about the significant increase and its rationale.

JPMorgan’s shares have gained 8.7% this year, surpassing the KBW Bank Index’s 19% decline. Wells Fargo and Citigroup reported strong results, with Bank of America and Goldman Sachs expected to report on Tuesday, and Morgan Stanley disclosing results on Wednesday.

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