(Adds details on lending, other banks' results)
By Sweta Singh and David Henry
April 13 JPMorgan Chase & Co reported a
17 percent jump in quarterly profit on Thursday, topping analyst
expectations as higher interest rates fueled trading activity
and helped the largest U.S. bank earn more from lending.
The Federal Reserve's decision to hike rates in March for
the second time in three months led investors to reposition
portfolios, as did elections in Europe and news about Britain's
progress in leaving the European Union. That increased activity
boosted first-quarter revenue in JPMorgan's markets-related
businesses, particularly fixed-income trading.
The bank also reported growth in loans and deposits and was
able to earn more from lending as interest rates ticked higher.
However, its pace of loan growth, much like in the broader U.S.
banking industry, has slackened recently.
Wells Fargo & Co and Citigroup Inc also
reported results on Thursday, with Citi showing similar gains in
trading and Wells Fargo hurt by a slowdown in mortgage lending.
Overall, JPMorgan earned $6.4 billion in the first quarter,
or $1.65 per share, up from $5.5 billion, or $1.35 per share a
year earlier. The bank's total net revenue rose 6 percent to
$24.7 billion from $23.2 billion in the year-ago quarter.
Analysts had expected earnings of $1.52 a share, according
to Thomson Reuters I/B/E/S.
JPMorgan shares rose 0.5 percent to $85.79 in premarket
JPMorgan's corporate and investment banking division, which
includes the trading business, reported a 17 percent rise in
revenue to $9.5 billion, the biggest gain among its four major
business lines. Weaker advisory fees were more than offset by
gains in revenue from underwriting, securitized products,
interest rate-related products, prime brokerage and corporate
On a conference call with journalists, Chief Financial
Officer Marianne Lake said some customers decided to borrow by
issuing bonds rather than taking out loans.
Mortgage borrowing was a dark spot in the bank's results,
with mortgage fees and loan servicing revenue tumbling 39
percent to $406 million from $667 million. Higher interest rates
have dissuaded borrowers from refinancing, and JPMorgan
executives had said in February they expected non-interest
mortgage revenue to fall throughout the year.
Even so, the bank managed to grow its core book of loans by
9 percent on an annual basis and nearly 1 percent from the prior
quarter. Its net interest income, an important measure of
profitability that shows the difference between a bank's cost of
money and how much it receives for the funds, rose 6 percent.
In a statement, Chief Executive Jamie Dimon said U.S.
consumers and businesses are "healthy overall" and that the
economy could further improve if the government pursues
(Reporting by Sweta Singh in Bengaluru and David Henry in New
York; Writing by Lauren Tara LaCapra; Editing by Bernadette
Baum and Meredith Mazzilli)