Oct 13 (Reuters) - JPMorgan Chase's profit rose in the third quarter as surging rates and the acquisition of failed First Republic Bank drove its interest income to a record high, the largest U.S. lender reported on Friday.
Chief Executive Officer Jamie Dimon said that although U.S. consumers remained healthy, several geopolitical factors including the war in Ukraine and conflict in Israel could keep inflation at elevated levels.
"This may be the most dangerous time the world has seen in decades," Dimon said.
Shares of the bank rose 1.1% in premarket trading.
The Federal Reserve's rate increases have bolstered banks' net interest income (NII), or the difference between what they earn on loans and pay out on deposits.
NII rose 30% to $22.9 billion, the bank said. It also hiked its 2023 NII forecast to $89 billion, excluding markets, compared with a prior forecast of $87 billion.
The provision for credit losses was $1.4 billion, 10% lower than last year as the bank released $113 million of reserves.
JPMorgan bought First Republic in May in a government auction, after weeks of failed rescue attempts and aborted discussions involving some of the most powerful Wall Street executives and U.S. officials.
INVESTMENT BANKING LULL
While the market for mergers and acquisitions (M&A) and initial public offerings (IPOs) is showing signs of recovery, lingering economic uncertainty continues to be a drag on dealmaking activity.
September saw stock market debuts of several high-profile companies, including SoftBank Group's chip designer Arm Holdings and grocery delivery app Instacart. JPMorgan was an underwriter for both of those listings.
But these newly listed companies have given back most of their gains after their first-day pop, crushing hopes of a meaningful recovery in the IPO market.
Investment banking revenue at JPMorgan fell 6% to $1.6 billion.
The lender reported a profit of $13.15 billion, or $4.33 per share, for the three months ended Sept. 30. That compares with $9.74 billion, or $3.12 per share, a year earlier.
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