Higher interest rates boost US bank earnings

NEW YORK - Large US banks reported higher third-quarter earnings on Friday, reflecting the benefits of higher interest rates for the financial sector with little of the downside that has worried financial markets this week.

Shares of JPMorgan Chase, Citigroup and Wells Fargo all rose in pre-market trading following the stream of reports, the unofficial kickoff of earnings season.

The results come on the heels of a two-day stock market rout sparked in part by a sudden rise in 10-year US Treasury bond yields.

Banks typically win higher profits from interest rates but the sell-off this week reflects worries that spiking interest rates could shock the global economy.

"The economy is still very strong," said JPMorgan Chief Executive Jamie Dimon, who said the rise in interest rates thus far was unsurprising in light of a strengthening US economy and not worrisome at this point.  

In the bank's statement, Dimon had warned of a potential economic hit from "increasing economic and geopolitical uncertainties." 

And in a conference call with reporters, Dimon offered a litany of concerns, including trade conflicts, Brexit, the unwinding of quantitative easing stimulus programs and geopolitical concerns from Italy and Saudi Arabia that were worrisome but had yet to derail growth.

"So far, we have a strong economy despite these overseas geopolitical issues bursting all over the place," he said.