Profits at JPMorgan Chase (JPM) fell in the third quarter as it set aside more money to cover future credit losses, but activity on Wall Street exceeded expectations.

Net profit was $12.9 billion, down 2% from the same period last year, while provisions for credit losses rose to $3.1 billion, up 125% from the same period last year.

That could be a sign that the largest bank in the U.S. expects conditions to worsen for some of its borrowers, especially in the credit card industry.

But JPMorgan’s investment banking business performed better than analysts expected as revenue grew 29% from a year ago to $2.4 billion.

That should reinforce the belief on Wall Street that dealmaking is on the way back after a two-year drought.

There were other positive signals from JPMorgan’s results. Total revenues rose and a key measure of lending profits, known as net interest income, also rose. The bank even raised its estimate of the net interest income it expects to generate for the full year by $1.5 billion.

The bank’s shares rose more than 1% in pre-market trading.

The results kicked off third-quarter earnings season, as lenders face questions about how a new Federal Reserve rate-cutting cycle will impact the largest U.S. banks.

JPMorgan CEO Jamie Dimon said his bank reported “strong underlying operating and financial results in the third quarter,” but he also highlighted concerns about geopolitics, saying that “recent events demonstrate that conditions are treacherous and increasingly worse.” become.”

He said that “inflation is slowing and the US economy remains resilient,” but “several critical issues remain, including large budget deficits, infrastructure needs, trade restructuring and remilitarization of the world.”

“While we hope for the best, these events and the prevailing uncertainty demonstrate why we must be prepared for any environment.”

David Hollerith is a senior reporter for Yahoo Finance, covering banking, cryptocurrency and other areas of finance.

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