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JPMorgan jumps as Q2 net beats estimates despite lower fixed income trading business

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JPMorgan Chase & Co (NYSE:JPM), the biggest U.S. bank by assets, rose in premarket trade after  saying second-quarter profit beat estimates as fixed-income trading revenue fell less than expected.

Shares gained 3.4 percent to $58.18 at 9:39 p.m. in New York. The stock had lost 3.7 percent since the beginning of the year through yesterday.

Net income declined 7.9 percent to $5.99 billion, or $1.46 per share, from $6.5 billion, or $1.60 per share, a year earlier, the New York-based firm said in a statement today. 

Revenue fell to $25.35 billion.

Wall Street was for adjusted profit of $1.31 per share on revenue of $23.8 billion.

JPMorgan warned investors in May to expect Wall Street’s trading slump and weak mortgage results to continue through the second quarter.

JPMorgan saw growth in its key business: Core lending rose 8 percent from the same time a year ago, and commercial banking rose 9 percent. But both big banks saw their revenue from trading fall. JPMorgan Chase logged $3.5 billion in bond trading in the second quarter, down 12 percent from a year previous. Stock trading revenue was down 10 percent.

JPMorgan has also redoubled its focus on wealth management and private banking business, areas that were largely untouched by the latest round of regulations. Revenue within the private bank rose 5 percent, to $1.6 billion, from the period a year earlier. The bank also wooed more client assets, bringing the total to $2.5 trillion, up 15 percent from a year earlier.

JPMorgan, the second largest U.S. mortgage lender after Wells Fargo & Co, said its profit from mortgage lending fell 38 percent to $709 million, while mortgage application volumes dropped 54 percent to $30.1 billion.

Overall U.S. mortgage lending volumes have fallen for the past 15 months as mortgage rates rise. Demand for loans was also hit by a weaker spring selling season compared with last year.

"Toward the end of the second quarter, we saw encouraging signs across our businesses including an uptick in wholesale utilization, strengthening pipelines in our commercial and business banking segments, and some improvements in markets activity," Chief Executive Jamie Dimon said in the statement.

Wells Fargo & Co. (NYSE:WFC), the most valuable U.S. bank, posted second-quarter profit last week that rose 3.8 percent on lower credit costs, while Citigroup Inc. (NYSE:C) said yesterday that net income fell 96 percent as the company agreed to pay the government $7 billion to resolve a mortgage-related probe. Bank of America Corp. (NYSE:BAC), the second-biggest U.S. lender by assets, is scheduled to report results tomorrow.

 

 

Quick facts: JPMorgan Chase & Co

Price: 122.34 USD

NYSE:JPM
Market: NYSE
Market Cap: $372.92 billion
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