JPMorgan Chase & Co. posted earnings that beat analysts’ estimates, fueled by better-than-expected trading revenue and lending margins.
The report, which sent shares higher in early trading, is the first to show how much money the biggest U.S. banks made from helping clients trade bonds and stocks. Chief Financial Officer Marianne Lake said in February that while markets revenue would be modestly higher in the first quarter, the firm would probably suffer from a difficult comparison to a strong performance in 2016.
The 17% gain in fixed-income trading revenue, to $4.22 billion, was the smallest in a year. JPMorgan reported a surprise increase in equity trading, which rose 2% to $1.61 billion.
Bank shares have climbed since the November U.S. election in part on expectations the Federal Reserve would buoy bank profits with higher interest rates. That appears to be starting, as JPMorgan’s net interest margin — the difference in what it charges borrowers and pays depositors — rose 11 basis points from the preceding quarter to 2.33 percentage points, the first increase in a year. That beat the 4-basis-point estimate of KBW analysts.
Companywide revenue rose 6% to $25.6 billion, compared with the $25.2 billion average estimate of analysts surveyed by Bloomberg. The bank said noninterest expenses rose 9% to $15 billion, topping analysts’ $14.6 billion estimate.
Net income rose 17% to $6.45 billion, or $1.65 a share, from $5.52 billion, or $1.35, a year earlier. Adjusted earnings were $1.57 a share, beating the $1.52 average estimate of 23 analysts surveyed by Bloomberg.
JPMorgan shares dropped 1% this year through Wednesday, the second-best performance among the six biggest U.S. banks. They climbed 1.7% to $86.86 in early trading at 6:46 a.m. in New York.
