JPMorgan Chase said revenue fell 6.4%, driven by a slump in trading and mortgage banking.
While net income rose 22% to $6.8 billion, the New York company said Tuesday, adjusted earnings per share, excluding a tax benefit and other items, were $1.32. That missed the $1.38 average estimate of 29 analysts surveyed by Bloomberg.
Wall Street firms have turned to expense reductions as low U.S. interest rates and volatile markets crimp revenue. Widening spreads damped credit and mortgage trading and discouraged bond issuance in the third quarter, Macquarie Group Ltd. told clients in a research note last week. JPMorgan, led by Chief Executive Jamie Dimon is the first of the big U.S. lenders to report quarterly results.
"We saw the impact of a challenging global environment and continued low rates reflected in the wholesale businesses' results," Dimon said in a news release.
Noninterest expenses fell 2.7% to $15.4 billion.
"Expenses had to come down, especially with trading revenue being lower," Pri de Silva, a senior banking analyst at CreditSights Inc. in New York, said in an interview before results were released. "Compensation is one lever that the bank can control."
JPMorgan shares have slid 1.6% this year, outperforming the 6.6% decline of the 88-company Standard & Poor's 500 Financials Index.
Bank stocks during the period had their worst performance since 2011 as expectations for when the Federal Reserve will raise its benchmark rate shifted to next year, which would leave the industry's margins under pressure even longer. The Fed left rates unchanged in September on concern China's slowing growth would drag down other economies. The 24-company KBW Bank Index tumbled 9.5% in the third quarter, worse than the 6.9 percent drop for the broader S&P 500 Index.
JPMorgan agreed to pay almost a third of a $1.86 billion settlement to end accusations that a dozen big banks conspired to limit competition in the credit-default swaps market, people with knowledge of the deal said this month. The accord averts a trial following years of litigation by investors including hedge funds, pensions, university endowments and small lenders who alleged that global banks conspired to control information about the multitrillion-dollar swap market in violation of antitrust laws.
In July, regulators said JPMorgan will pay $166 million and change credit-card collection practices after finding that the bank pursued the wrong borrowers, sought incorrect amounts or debts that were too old, or relied on documents with improper signatures.
Bank of America and Wells Fargo are scheduled to report results Wednesday. No. 3 Citigroup Inc. is scheduled to release results Thursday.