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JPMorgan Tops the Street, Top Line Boosted by Consumer Cards and Loans

JPMorgan's results for the third quarter were above expectations, buoyed by consumer loan growth.  The firm’s $1.58 a share topped the Street by 19 pennies.  Investors seemingly focused on the top line, where revenues of $25.5 billion were better than the $24 billion that had been projected by analysts.

Consumer banking remains among the biggest drivers of the top line (at 44 percent of the total), and sales here were up 4 percent to $11.3 billion. Growth in individual loans and deposits helped lift that segment and mortgage banking was up 21 percent in the quarter, offsetting the card commerce and auto loans segment, which slipped one percent year over year to $4.7 billion.  Expenses tied to that lending were up, most notably in the provision for credit expenses at $1.3 billion.

And in the corporate segment, the commercial bank results were also up as corporate lending activity picked up some steam, locking in a 14 percent rise in revenues to $1.9 billion.  With commentary on the consumer side of the asset book, management stated in its release that its Sapphire Card has enjoyed a strong response — so much so that the company has seen double digit percentage card growth, to the tune of 35 percent, coming on the heels of both Sapphire and Freedom Unlimited card growth.

On the conference call with investors, JPMorgan CFO Marion Lake noted that acquisition costs linked to that card growth, particularly in Sapphire (well noted for its relatively generous rewards program and high annual fees) remains among “high class problems” for the bank to have.

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