JPMorgan profit down as trading revenue falls
New York, April 12, 2014
JPMorgan Chase & Company posted far weaker-than-expected quarterly profit as uncertainty about the US economy weighed on investor trading volumes and consumer borrowing.
Results from the first of the major Wall Street banks to post earnings underscore how difficult the first quarter was for the financial sector.
JPMorgan's bond trading revenue plunged 21 per cent, and mortgage lending revenue fell 84 per cent from the same quarter last year.
Most of the bank's big businesses, including commercial lending and credit cards, delivered lower profits. But the bank is not responding by dialing up its risk-taking in commercial lending, and it views falling revenue in its bond trading business as part of a business cycle instead of a symptom of a broad-based and lasting decline in fixed-income trading.
"It's not like selling cereal - it's not like your volumes go up 2 per cent every day," chief executive Jamie Dimon said. The business will grow over the next decade or two, he added.
Dimon, who earned plaudits for keeping his bank consistently profitable during the financial crisis, is struggling to figure out how to navigate the current environment.
Yesterday's results showed how the bank's troubles appear to be extending beyond outsized legal settlements and meeting new rules, and into areas more fundamental to the business, such as loan demand and trading volume.
Overall, net income fell 19 per cent to $5.27 billion, or $1.28 per share, from $6.53 billion, or $1.59 per share, in the same quarter of 2013, the biggest US bank said.-Reuters