High interest rates boost US bank profits

The two American banks, JPMorgan Chase and Wells Fargo, continued to benefit from the rise in interest rates in the United States in the third quarter. Due to interest rate increases by the US Federal Reserve, banks are making more money on loans.

Customers have to pay more interest on loans, while banks increase savings rates less sharply. Therefore, the net interest income of banks will rise significantly. JPMorgan generated profits of about $13.2 billion last quarter. This is $3.5 billion more than the previous year. In addition, the bank also benefited from the acquisition of collapsed regional bank First Republic Bank. This allowed the addition of approximately $173 billion in loans.

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According to JPMorgan CEO Jamie Dimon, the situation for American consumers “remains healthy.” According to Dimon, consumers are slowly using their financial reserves as a result of rising inflation. He also warned that several geopolitical factors could keep inflation at high levels.

Wells Frago is not lagging behind

Wells Fargo also beat analysts’ expectations and saw net interest income rise sharply in the third quarter. Therefore, the bank once again raised its forecasts for the full year. Wells Fargo set aside $1.2 billion last quarter for loans that may not be repaid. That was also lower than analysts expected.