JPMorgan Chase, the largest U.S. bank by assets, reported Friday a profit of $5.7 billion for the third quarter, higher than analysts anticipated, helped by gains from mortgage and trading operations, according to Bloomberg. Net profit rose by 34% from $4.26 billion in the third quarter of last year to $5.71 billion. The gain per share was $1.4, while analysts surveyed by Bloomberg expected a gain of $1.2.
A bad investment in derivatives cost JPMorgan $5.8 billion in the first half of the year and triggered investigations of the authorities in the U.S. and other countries. Chief Executive Officer, Jamie Dimon, managed to regain investor’s confidence, while benefiting for government programs and increased demand for mortgages. Mortgage loans in the U.S. market increased by about 33% in the third quarter to$ 412 billion, following incentives for refinancing, as estimated by an association of bankers active in this segment.
Bond sales by companies rose 66%, to $987.3 billion in the third quarter of 2012 compared to the same period of last year, Bloomberg calculations show. JPMorgan’s earnings rose 6% in the third quarter to $25.15 billion, according to MarketWatch portal.
The profit of Wells Fargo, the fourth largest U.S. bank by assets, increased by 22% in the third quarter, from $4.06 billion a year ago to $4.94 billion, due to higher income and lending activities, writes MarketWatch.
“Credit quality continued to improve in the third quarter, following consolidation of the financial situation of companies and population and housing market recovery in many regions of the United States,” said manager for risk prevention, Mike Loughlin. Revenue rose 8.1% to $21.21 billion.
U.S. government sued Wells Fargo this week on charges of negligence in lending. The offenses were dating back to May 2001. American prosecutors want to get damages of several hundred million dollars on behalf of the Federal Housing Administration, which itself does not grant loans but insures loans provided by banks.
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