JPMorgan Profit Falls 8% as Securities Trading Income Drops
JPMorgan Chase & Co, the biggest US bank by assets, reported an 8 per cent decline in second-quarter profit as a pullback in trading of bonds and currencies by big institutions hit revenue in its securities trading business.
Net income fell to $5.99 billion, or $1.46 per share, from $6.5 billion, or $1.60 per share, in the same quarter of 2013.
The results for both periods included special items.
Analysts on average had expected earnings of $1.29 per share, according to Thomson Reuters I/B/E/S. It was not immediately clear if the reported results were comparable.
JPMorgan shares were up 1.8 per cent at $57.31 in premarket trading. Up to Monday's close, the stock had risen just over 2 per cent since the start of the year, slightly underperforming the KBW bank stock index.
"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 a statement.
Revenue from fixed-income and equity markets fell 15 per cent to $3.5 billion in the quarter ended June 30 compared with the year-earlier quarter.
JPMorgan executives have said that institutional investors seem to be shying away bonds because of a lack strong opinions about future moves in interest rates and currencies.
Bankers maintain that volumes will rebound eventually, but some investors worry that much business may be lost forever due to regulatory changes designed to make the banking system safer.
JPMorgan, the second largest US mortgage lender after Wells Fargo & Co, said its profit from mortgage lending fell 38 per cent to $709 million, while mortgage application volumes dropped 54 per cent to $30.1 billion.
Overall US 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.
Wells Fargo, which reported last Friday, said its mortgage revenue dropped 39 per cent in the quarter.
Copyright: Thomson Reuters 2014
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