New York: JPMorgan Chase & Co, the first of the major banks to report third-quarter earnings, posted a better-than-expected profit, helped by lower loan losses in its retail and credit card units.

The bank's mortgage and credit losses have eased this year as the economy has improved. But its loan book is not growing, raising questions about where future profit growth will come from.

JPMorgan shares climbed slightly in premarket trading after the second-largest US bank by assets reported third-quarter net income of $4.4 billion (Dh16 billion), or $1.01 a share, up from $3.6 billion, or 82 cents a share, a year earlier.

Analysts on average expected 90 cents a share, according to Thomson Reuters I/B/E/S.

The bank wrote off fewer consumer loans as uncollectable in the quarter, helping it put aside less money to cover losses on such loans.

Analysts and investors questioned whether Citigroup Inc and Bank of America Corp will be able to match JPMorgan's results when they report next week.

"I think [JPMorgan has] set the bar extremely high," said Michael Holland, money manager at Holland & Co in New York.

"What they've said is that in this tough environment they are the A Team and it is going to make it very tough for the rest of them to live up to it."

Investment banking profit fell by a third to $1.2 billion, which could be a bad sign for rivals Goldman Sachs Group and Morgan Stanley, which report quarterly results next week.

Mortgages

JPMorgan's card services unit reported a profit of $735 million, compared with a year-earlier loss of $700 million. Its retail unit posted a profit of $907 million, up from just $7 million a year earlier.

Profit in its mortgage banking and other consumer lending business fell 50 per cent to $207 million, even as the bank set aside less money for loan losses in the unit.

Chief Executive Jamie Dimon sounded cautious about the bank's outlook for its mortgage business, saying he expects mortgage losses to remain high for the next several quarters.

"If economic conditions worsen, mortgage credit losses could trend higher," he said in a statement.

The mortgage business is also under pressure as some legislators push for the largest mortgage lenders to suspend foreclosures across the United States, following allegations that some banks used shoddy paperwork to kick struggling borrowers out of their homes.