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JPM's Dimon: Rising Rates Won't Hurt Our Business

Paul Toscano
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JP Morgan Chase (JPM) chairman and CEO Jamie Dimon told CNBC that the company can do well even in a rising interest rate environment, despite what that may do to mortgage rates, as long as the overall economy is doing well.

The head of the largest U.S. bank spoke with CNBC's "Squawk on the Street" in a wide-ranging interview Friday.

Wells Fargo (WFC) does "a lot better in the mortgage business than us. They have been doing better for a long time," Dimon said. "At the end of the day we're going to have a great mortgage business. We're going to be really good at servicing, we just have a little more wood to chop."

All banks have to adjust to the regulatory environment in the U.S. and globally, Dimon said. "Eventually, we'll be back to business as usual. That may take another year or two."

Regulation, he said, will eventually "determine how aggressively banks will grow, how aggressively they can pay dividends and return capital."

Earlier Friday, JP Morgan reported that profit surged in the second quarter by 31 percent, based on a rebound in trade revenue.

It said it generated a total of $1 trillion in raised capital and extended credit during the first six months of 2013. Of the extended credit, $9 billion went to small businesses and $294 billion to large corporations.

(Read More: JPMorgan Slays 'Whale' in 2nd Quarter as Profit Surge )

Net income at the bank rose to $6.5 billion, or $1.60 per share, in the second quarter ended June 30 from $4.96 billion, or $1.21 per share, a year earlier. JPMorgan also set aside less money to cover bad loans.

The corporate and private equity division, which a year ago lost $1.78 billion after-tax because of the London Whale debacle, lost $522 million in the latest quarter.

The bank said revenue from fixed income and equities rose 18 percent in the quarter compared with a year earlier.

(Related: Wall Street Doesn't Like the Way JP Morgan Beat )

Mortgage banking income, which comes from making home loans and servicing existing mortgages, fell 14 percent to $1.1 billion as a refinancing wave subsided and interest rates rose.

JP Morgan stock has been volatile in recent weeks because of concern that higher interest rates will erode the value of bank assets before they generate new revenue from lending.

(Related: Analyst Says This Bank Has 20% Upside )

"I don't think the Street likes the way they beat," Raymond James bank analyst Anthony Polini told CNBC. "We had some negatives in the quarter, primarily net-interest margin, net-interest income, [and] loan growth. About 15 percent of that headline number probably is fluff."

- Reuters contributed to this report.

- Jim Cramer's Charitable Trust owns shares of JP Morgan

- By CNBC's Paul Toscano. Follow him on Twitter and get the latest stories from "Squawk on the Street" @ToscanoPaul


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