JPMorgan Chase returns to profit as bank earnings lift stocks
JPMorgan Chase, the largest US banks by assets, on Tuesday reported a third-quarter profit after booking a loss in the same period a year ago. Speaking on a conference call , CEO Jamie Dimon also addressed the massive data breach that affected JPMorgan Chase customers last week.
The bank reported earnings of $5.6 billion, or $1.36 share, compared with a loss of $380 million, or 17 cents a share, in the same period a year ago.
Revenue for the period rose 5 percent to $24.25 billion from $23.12 billion a year ago.
JPMorgan shares were down 36 cents, or 0.6 percent, at $57.80 in pre-market trading. The stock is down 0.5 percent this year.
Speaking on a conference call after the company reported its earnings, JPMorgan CEO Jamie Dimon also addressed the massive cybersecurity breach that affected JPMorgan Chase customers last week, saying that more coordination between businesses and government is needed to combat the rising threat of cyberattacks.
New York-based JPMorgan said earlier this month that a breach of its computer systems this summer compromised customer information pertaining to roughly 76 million households and 7 million small businesses. Among the customer data stolen were names, addresses, phone numbers and email addresses.
A growing number of financial firms and major retailers have revealed their customer's data has been stolen. Sears said Friday that a data breach at its Kmart stores that started last month may have compromised some customers' credit and debit cards, and Target and Home Depot have also been the victims of cyberattacks.
While Dimon said that the coordination between his bank, law enforcement agencies and other financial institutions has been good so far, it would likely need to improve as the threats escalate. Dimon said that JPMorgan had warned other banks about the attacks that it was experiencing to help them prevent breaches on their own systems.
"Cyber is a big deal," Dimon said on a call with reporters on Tuesday. "It's going to be an ongoing battle, and unfortunately battles will be lost."
JPMorgan is currently spending about $250 million a year on cyber security, and employs about 1,000 people in the area, according to Chief Financial Officer Marianne Lake. The bank expects that those costs will rise next year and beyond as the attacks evolve and become more sophisticated.
Dimon was speaking on a conference call after the company reported its third-quarter earnings.
U.S. stocks rose moderately in early trading Tuesday as investors pored over corporate earnings reports. Several major banks kicked off the third-quarter corporate earnings season. JPMorgan Chase returned to a profit, but missed Wall Street's expectations. The stock shed 61 cents, or 1 percent, to $57.56. Wells Fargo's earnings matched analysts' expectations, while Citigroup's results came in better than expected. Wells Fargo slipped 74 cents, or 1.5 percent, to $49.45. Citigroup rose $1.41, or 2.8 percent, to $51.31.The market was coming off a three-day slump caused by rising worries that global growth could be slowing. Downbeat economic reports out of Germany promised to add to those concerns.
The Dow Jones industrial average rose 54 points, or 0.3 percent, to 16,372 as of 10:09 a.m. Eastern time. The Standard & Poor's 500 index added seven points, or 0.4 percent, to 1,882. The Nasdaq gained 19 points, or 0.5 percent, to 4,233.