JPMorgan Q2 profit jumps as bank cashes in Visa shares

financialpost.com:

NEW YORK — JPMorgan Chase Co.‘s profits jumped sharply in the second quarter as the bank cashed in billions of dollars of its holdings in Visa Inc. But the bank’s results were also helped by higher interest rates, as well as consumers who seemed to still want to spend, despite geopolitical and economic uncertainties.

The nation’s biggest bank by assets on Friday posted a profit of US$18.15 billion, up 25 per cent from a year earlier. On a per share basis, JPMorgan earned US$6.12 per share, which beat analysts’ estimates.

A significant part of JPMorgan’s results was a US$7.9 billion gain on its stake in Visa. The bank converted its ownership in the payment processing giant into common stock in the second quarter. The bank also donated US$1 billion of Visa shares to JPMorgan’s philanthropic organization.

Without the gain, profit fell compared with the year-ago quarter due to higher expenses. The bank set aside US$3.1 billion to cover potentially bad loans, up sharply from a year earlier, as the bank acknowledged that delinquencies were climbing among some Americans. On a call with reporters, executives said they remain unconcerned about the rising delinquencies, adding that the U.S. consumer is doing just fine.

JPMorgan chief executive Jamie Dimon repeated his warnings about heightened geopolitical risks and inflation in his statement to investors. Dimon, in several interviews, has said he believes that Americans and the bank should be preparing for inflation to remain higher than normal for longer than people are expecting.

“There has been some progress bringing inflation down, but there are still multiple inflationary forces in front of us: large fiscal deficits, infrastructure needs, restructuring of trade and