JPMorgan Chase (NYSE: JPM) has released its earnings report for the third quarter of 2023, showing that the bank has surpassed analysts’ profit expectations for Q3.

JPMorgan Q3 2023 Earnings

According to the report, JPMorgan’s earnings per share (EPS) for the quarter were $4.33, higher than the estimated $3.86. The bank also reported a profit of $13.15 billion, a 35% increase compared to the previous year. The company’s revenue reached $40.69 billion, surpassing the estimated $39.63 billion from the London Stock Exchange Group (LSEG).

In addition, JPMorgan exceeded estimates for total deposits with $2.38 trillion, compared to the estimated $2.37 trillion. The bank also achieved an 18% return on equity, exceeding the estimated 16%. Other notable figures include a return on tangible common equity of 22% (higher than the estimated 19.7%), a book value per share of $100.30, and a tangible book value per share of $82.04.

Furthermore, JPMorgan’s non-interest expenses for Q3 2023 were $21.76 billion, slightly lower than the estimated $21.78 billion. The company’s provision for credit losses was $1.38 billion, significantly lower than the estimated $2.49 billion. Overall, JPMorgan’s adjusted revenue for the quarter was $40.69 billion, higher than the estimated $39.92 billion.

As of the time of writing, JPMorgan’s stock is trading at $147.33 in premarket trading, representing a 1.06% increase from the previous close of $145.81. According to MarketWatch Data, JPMorgan’s stock has gained 0.49% over the past 5 days, but has experienced a loss of more than 2% over the past 1 and 3 months, respectively. However, the stock has seen a year-to-date (YTD) gain of 8.73% and a 31.14% increase over the past year.

JPMorgan Q2 Earnings and Revenue Target

In the previous quarter, JPMorgan Chase also surpassed expectations. The bank reported a total revenue of $42.4 billion for Q2 2023, most of which came from increased interest income and rates. However, this figure is lower than the revenue reported for Q3. JPMorgan’s adjusted EPS for Q2 was $4.37, higher than the figure recorded for Q3. The net income for Q2 increased by 67% (or 40% excluding the First Republic acquisition) to $14.5 billion.

In May, JPMorgan raised its key revenue target for 2023 at an investor presentation. The new target is $84 billion, which is $3 billion higher than the previous guidance given in April. The increase in revenue target came after JPMorgan acquired First Republic Bank. The acquisition raised concerns about larger banks becoming too powerful by acquiring smaller ones. JPMorgan Chase is currently the world’s largest bank in terms of market capitalization and total assets, with a valuation of $424.72 billion as of August 2023.

Despite JPMorgan’s strength, major banks are feeling the impact of the ongoing interest rate hikes initiated by the Federal Reserve in an effort to combat inflation. Banks now need to shore up deposits because customers are moving their money to money market funds and other high-yield products. To prepare for potential losses from loans, JPMorgan and other banks have started setting aside funds.

In August, JPMorgan increased its stake in Brazilian digital bank C6 from 40% to 46%. The initial stake was purchased in June 2021, and the bank decided to increase it after C6 gained an additional 8 million customers, bringing the total to 25 million. The financial details of the transaction were not disclosed.