JPMorgan Chase posts a strong Q3 performance, with particular growth in the investment banking division.

JPMorgan Chase, the second largest bank in the US, today (14 October) reported a third quarter net income of $3.6 billion (£2.5bn), exceeding many analysts’ expectations.

During the same period last year, the bank earned a much lower net income of $527 million.

Between July and September 2009, JPMorgan Chase performed well in Asset Management, Commercial Banking and Retail Banking departments, outweighing the losses made on credit cards and consumer loans.

Although it appears economic activity is improving in the US, the bank warned that the cost of credit was likely to remain high and “are expected to stay elevated for the foreseeable future.”

Jamie Dimon, Chairman and CEO, said: “Accordingly, we have added $2bn to our consumer credit reserves, bringing the firmwide total to $31.5bn, or 5.3% of total loans.”

JPMorgan Chase is the first US banking giant to post its third quarter results, with reports from the Citigroup, Goldmann Sachs and Bank of America expected later this week.

The consumer lending business made a loss of $1bn, up from $659m lost in the same period a year earlier.

Card services also made a net loss of $700m during the quarter. However, it is an improvement on the $992m lost between July and September 2008.

JPMorgan Chase’s investment banking business made a net income of $1.9bn, up from $1bn in the third quarter of last year.