J.P. Morgan Chase home lending the only business unit with a revenue decline
Shares of J.P. Morgan Chase & Co. rose 0.9% in premarket trade Friday, after the banking giant kicked off third-quarter earnings reporting season with profit and revenue that rose above expectations. The stock pared earlier gains of 1.7% seen before the results. Higher interest rates helped boost results, with revenue rising 5% from a year ago to $27.82 billion, above the FactSet consensus of $27.44 billion, and with net interest income climbing 7% to $14.1 billion to top expectations of $14.0 billion. Higher rates hurt the bank’s home lending business, however, which was the only segment that saw revenue decline, as part of the bank’s consumer and community banking unit that saw revenue rise 10% to $13.3 billion. Home lending revenue fell 16% to $1.3 billion, weighed down by lower net servicing revenue, and by loan spread and production margin compression. The stock has gained 1.2% over the past three months, while the SPDR Financial Select Sector ETF has lost 2.6% and the Dow Jones Industrial Average has tacked on 0.5%.