JPMorgan Chase, the biggest US bank by assets, reported record revenue and net income in the first quarter of 2019 and believes the US economy will continue to grow at a solid pace (JUSTIN SULLIVAN)

New York (AFP) – JPMorgan Chase reported bumper results on Friday and touted a still-solid US economy, while Wells Fargo slashed a key profit benchmark, sending its shares sharply lower.

JPMorgan notched a rise in first-quarter profits following a strong performance in the consumer and community banking division, the bank’s biggest segment by revenues.

A key factor was increased net interest income, which measures the bank’s ability to make money through its mix of lending products and paying interest on deposits.

Net income was $9.2 billion, up 5.4 percent from the year-ago period.

Revenues were $29.9 billion, up 4.7 percent.

JPMorgan’s news release included positive commentary on the US economy, although the bank did boost its provisions for credit losses following downgrades on some commercial and industrial clients.

Chief Financial Officer Marianne Lake described the downgrades as scattered among a “handful of names” and not reflective of a broader deterioration in the US economy.

Chief Executive Jamie Dimon touted “record” revenues and net income in the first quarter in a statement.

“Even amid some global geopolitical uncertainty, the US economy continues to grow, employment and wages are going up, inflation is moderate, financial markets are healthy and consumer and business confidence remains strong,” he said.

JPMorgan shares were up 4.7 percent at $111.17 in early-afternoon trading. Bank of America, Citigroup and other large banks that report next week also rose.

Shares of Wells Fargo initially climbed after the bank reported better-than-expected results but faltered as the market digested executive comments on a conference call. 

– Weaker outlook –

The downcast remarks were the latest trouble sign at Wells Fargo, which has suffered a number of setbacks over the last two and a half years beginning with a fake accounts scandal that surfaced in September 2016. 

Chief Financial Officer John Shrewsbury cut the full-year forecast for net interest income, citing a lower outlook on interest rates and competitive pressures that have challenged profitability in lending and taking deposits.

The bank had previously projected a 2019 range of between down two percent and up two percent for net interest income. Wells Fargo now projects a decline of between two and five percent.

Among the factors, Shrewsbury said promotional high-yield certificates of deposit and other savings products for savers were costing the bank more than they had been.

Several analysts also probed the company’s regulatory travails, which have included unusual public criticism from the Federal Reserve and other bodies.

Acting Chief Executive Allen Parker said the bank was working hard to win back trust of regulators.

“I would say the feedback that we have heard is really not directed to any line of business. It’s really our larger corporate functioning in terms of our control system and framework for risk management,” Parker told analysts.

The bank will approach the work “with the appropriate level of urgency but we’re not going to prioritize urgency over getting it right,” he added.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.