JPMorgan profit rises as fixed-income trading rebounds

Tue Apr 14, 2015 12:37pm EDT
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By Tanya Agrawal and David Henry

(Reuters) - JPMorgan Chase & Co, the biggest U.S. bank by assets, reported a better-than-expected quarterly profit after a decision by the Swiss central bank to remove a cap on the franc shocked markets and spurred trading in currencies and bonds.

Bond trading revenue has been under pressure across Wall Street in recent years, and it is unclear if increases in customer volume in the first quarter will persist.

Chief Financial Officer Marianne Lake told reporters that volumes for the second quarter seemed to be a bit lower so far, although she added that it is too soon to say for sure.

JPMorgan's revenue from trading fixed income, currencies and commodities (FICC) by 5 percent to $4.07 billion in the first quarter.

The strong investment banking results helped boost JPMorgan's shares by as much as 2.5 percent to $63.61 on Tuesday morning, their highest since April 2000.

JPMorgan's investment bank is the world's biggest by revenue, according to research firm Coalition. Revenue from the business rose 8.4 percent to $9.58 billion in the quarter.

But the unit has been under pressure to cut costs as clients have reduced trading since the financial crisis and regulators have demanded that big banks take fewer risks, hold more capital and improve controls.

JPMorgan was the first big U.S. bank to report for the quarter, and the strong performance by its investment banking division bodes well for other banks with big trading businesses, such as Goldman Sachs Group Inc and Morgan Stanley. Goldman reports on Thursday and Morgan Stanley on Monday.   Continued...

A sign outside the headquarters of JP Morgan Chase & Co in New York, September 19, 2013. REUTERS/Mike Segar