JPMorgan Chase & Co.'s healthy third-quarter earnings bode well for other large lenders, but its credit costs and generous padding of reserves may have negative implications for smaller banks bogged down with problem loans.

Though its muscular showing solidified the banking company's standing as perhaps the country's healthiest, its credit costs of $9.8 billion — mostly provisions for loan losses — underscored the troubles facing other companies with exposure to U.S. consumers: They will keep losing money on bad loans. The problem for the industry is that most cannot weather the losses as well as JPMorgan Chase can.

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