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JPMorgan’s earnings jump, but interest rates remain a threat

    JPMorgan Chase, the largest lender in the United States, made $14.5 billion in profit last quarter, a big jump from the same period last year, it reported Friday. The bank was aided by virtually across the board growth, including increases in lending, credit card transactions and relative stability in investment banking. Shares of JPMorgan rose 3 percent in premarket trading.

    It was another quarter of the banner’s financial results, and a reminder that in banking, the rich tend to get richer.

    Given its size, JPMorgan is a proxy for the banking industry at large. Jamie Dimon, the bank’s chief executive, has deep political connections and his forecasts of the economy are scrutinized in some quarters as closely as the musings of a central banker.

    On Friday, Mr Dimon said in a statement that the US economy was “resilient”, echoing language he has repeatedly used this year, but listed a litany of risks, including consumers burning out their cash buffers and inflation remains high.

    And there were two interesting caveats to the bank’s latest results: Total deposits fell slightly, an indication that consumers are moving their money elsewhere in an era when higher interest rates have made it easier to find better-paying investments than in current accounts. Separately, but also related to interest rates, JPMorgan lost $900 million in investments in U.S. Treasuries and mortgage-backed securities last quarter, which have fallen in value as interest rates rise — but that was hardly a dent in results.

    JPMorgan and Mr. Dimon have been all over the news this year, thanks to their prominent role as an attempt at stabilization during the spring banking crisis that toppled three smaller lenders. JPMorgan bought one of those bankrupt banks, First Republic. In an indication of how difficult that institution had become, JPMorgan said Friday it was setting aside $1.2 billion to absorb losses in First Republic’s loan portfolio.

    Analysts still expect the acquisition to pay off in the end, thanks to First Republic’s base of wealthy clients and coastal affiliates, which Friday’s results show already support JPMorgan’s asset and wealth management arms.

    A whole series of other banks will report their quarterly figures in the coming week. Wednesday’s results from Goldman Sachs, which has publicly hinted that it would be a disappointing period, and regional banks such as Western Alliance and Comerica, which will try to prove they have recovered from their recent troubles, will be watching the most closely. being watched.