JPMorgan’s profits soar on trading, but overall revenue up just 2%

JPMorgan Chase, the biggest U.S. bank by assets, said profit rose 24% as bond-trading revenue climbed more than analysts estimated.

Fourth-quarter net income increased to $6.73 billion, or $1.71 a share, from $5.43 billion, or $1.32, a year earlier, New York-based JPMorgan said Friday in a news release. Twenty-six analysts surveyed by Bloomberg estimated per-share adjusted earnings of $1.43.

Chief Executive Jamie Dimon, 60, said last month that bond and stock trading volume was “much better” after the U.S. election, rising at least 15% from a year earlier. Political events including Donald Trump’s surprise victory and the U.K.’s Brexit referendum provided a jolt to sleepy global markets, putting firms on pace for their first annual increase in fixed-income trading revenue in four years.

“The U.S. economy may be building momentum,” Dimon said in the release. “There is opportunity for good, rational and thoughtful policy decisions to be implemented, which would spur growth.”

JPMorgan shares, which have surged 23% since the U.S. election, rose to $86.50 from $86.24 in early trading in New York at 8:01 a.m. Bank shares have rallied on optimism Trump’s tenure will bring lower taxes, higher interest rates and lighter regulation.

Revenue rose 2% to $24.3 billion, edging out the $24.2 billion average estimate of analysts surveyed by Bloomberg. Expenses fell 3% to $13.8 billion, compared with the $14 billion estimate.

Fixed-income trading revenue advanced 31% to $3.37 billion compared with the $3.26 billion average estimate. Equities-trading revenue rose 8.1% to $1.15 billion, compared with analysts’ $1.29 billion estimate.

Bank of America, the second biggest U.S. bank, reported a 43% increase in fourth-quarter profit earlier Friday, beating analysts’ estimates. Morgan Stanley, Citigroup and Goldman Sachs Group are scheduled to post results next week.

Bloomberg News
Banking Commercial banking Consumer banking Earnings Revenue and expenses Expense management JPMorgan Chase
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