JPMorgan Chase & Co. (JPM), the biggest U.S. bank, said profit climbed 12 percent, beating analysts' estimates, as first-quarter revenue from trading stocks and bonds increased for the first time since 2010.
Net income rose to $5.91 billion, or $1.45 a share, from $5.27 billion, or $1.28, a year earlier, according to a statement Tuesday from New York-based JPMorgan. Thirty-one analysts surveyed by Bloomberg estimated per-share earnings of $1.41. Excluding 13 cents in legal expenses and about 3 cents in accounting adjustments, earnings were $1.61 a share.
Trading revenue had a "very strong" start to the year as higher volatility boosted volume, Daniel Pinto, chief executive officer of JPMorgan's investment bank, said in February. Wall Street firms suffered declines in trading revenues last year amid unusually calm markets. That turned in the fourth quarter, and higher volatility helped results in the first three months of 2015, Chief Financial Officer Marianne Lake said Tuesday.
JPMorgan climbed 1.3 percent to $62.89 at 9:30 a.m. in New York. Companywide revenue in the quarter increased 4.1 percent to $24.8 billion, mostly driven by gains at the corporate and investment bank, the bank said.
'Macro Events'
Profit in Pinto's division rose 19 percent to $2.54 billion, the biggest increase in the firm's four main businesses. The company said "macro events" drove client activity in currencies, emerging markets, rates and equities.
Fixed-income trading revenue advanced 4.5 percent to $4.07 billion, exceeding the $3.94 billion average estimate of analysts surveyed by Bloomberg. Equity-trading revenue increased 22 percent to $1.61 billion, beating the $1.41 billion estimate. Trading during the first three months climbed on a year-over-year basis for the first time since 2010.
"We expected an improvement in fixed-income trading revenues," Pri de Silva, senior banking analyst at CreditSights Inc. in New York, said before results were released. "That should bode well" for competitors including Goldman Sachs Group Inc., Morgan Stanley and Citigroup Inc., de Silva said.
Investment Bank
Higher capital requirements prompted JPMorgan, the world's biggest investment bank, to lower its target for returns at that business to 13 percent from 15 percent, according to a February presentation. The firm is also considering whether to shrink in areas including interest-rates trading and prime brokerage because of the new capital rules, Pinto has said.
