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JPMorgan Chase & Co. reported a better-than-expected quarterly profit on Friday as gains from higher interest rates and growth in loans helped the bank offset weakness in bond trading revenue.

The largest U.S. bank by assets, whose results are often seen as a barometer of the economy, has benefited from a tax windfall and a strong economy that has led to higher interest rates and kept loan defaults in check.

All four of JPMorgan’s main businesses recorded a rise in revenue, with the consumer banking unit notching the biggest jump in revenue due to a healthy appetite for borrowing. Trading was the only weak spot in the results.

Chief Executive Jamie Dimon praised President Donald Trump’s tax cuts and deregulatory efforts, but cautioned on inflation and “geopolitical issues bursting all over the place.”

“The U.S. and the global economy continue to show strength, despite increasing economic and geopolitical uncertainties, which at some point in the future may have negative effects on the economy,” Dimon said.

JPMorgan shares fell 2 per cent late Friday afternoon. Worries about lacklustre trading and weak loan growth have weighed on bank stocks this year, with the S&P Financial index falling about 5 per cent and underperforming the broader S&P 500 index.

JPMorgan is the best performing stock among the big six U.S. banks. Including losses from the market carnage over the past two days that saw the Dow Jones Industrial Average drop more than 1,300 points, the stock is the only one among the big banks to be in positive territory for the year.

The bank’s average core loan book rose 6 per cent in the third quarter and outperformed Citigroup’s 4-per-cent growth even as higher rates crimped borrowing in areas such as mortgage loans.

Trading revenue fell 2.5 per cent amid an escalating trade war between Beijing and Washington and worries about slowing global growth.

Bond trading revenue fell 10 per cent – in sharp contrast to Citigroup’s 9-per-cent increase – while equity trading revenue was up 17 per cent.

JPMorgan’s total revenue rose 5.2 per cent to US$27.82 billion. Net income rose 24.5 perc ent to US$8.38 billion, or US$2.34 per share. Analysts had expected earnings of US$2.25 per share, according to I/B/E/S data from Refinitiv.

“Everything looks nice and steady for JPMorgan,” Octavio Marenzi, CEO of capital markets management consultancy Opimas said. “This portends well for the rest of the US banking industry.”

Net interest income – the difference between what the bank earns on loans and pay on deposits – rose 7 per cent to US$14.1 billion as the U.S. Federal Reserve raised rates four times since the third quarter of last year, bringing it to 2.25 per cent.

JPMorgan’s non-interest expenses were US$15.6-billion, up 7.2 per cent. Analysts had expected about US$15.7-billion of expenses in the quarter.

Operating costs have risen across the industry as banks are spending more on technology and expanding their business amid a strengthening economy

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