JPMorgan, one of the nation’s largest investment banks, announced this week its third-quarter profits exceeded analysts’ estimates. Despite this gain, revenues slumped 11 percent.
The New York-based lending giant cites narrowing revenue from banking and card services as one of the reasons for the fall.
“Revenues continue to be lower than I expected,” Charles Peabody, an analyst at Portales Partners, told Bloomberg. “You continue to see an improvement in credit quality, albeit in the third quarter at a slowing pace.”
JPMorgan and other large banks are facing a shortfall on interest margins, as the difference between what they pay for borrowing and what they receive on loans and securities tightens, the news provider reports.
Banks continue to struggle to curb costs after last year’s global credit crisis, as they deal with new litigation capping credit-card charges and overdraft fees. JPMorgan cites the fee income as a key factor in its profitability during the financial crisis, according to Bloomberg.
Officials at JPMorgan expect credit losses to remain at high levels for the next several quarters and mortgage credit losses to rise if the economy worsens, Bloomberg reports.