JP Morgan’s earnings fall as revenue from securities drop

JPMorgan Chase reported a far weaker-than-expected quarterly profit as revenue from securities trading fell in a climate of uncertainty about the strength of the economic recovery and the Federal Reserve’s intentions on interest rates.

Net income fell 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 today.

Analysts on average had expected earnings of $1.40 per share. The net earnings for both the latest and prior quarters included special items. Total net revenue fell 8.5 per cent to $22.99 billion, falling well short of the average estimate of $24.53 billion.

JPMorgan’s shares, which recently topped $61 to trade at their highest level in 13 years, were down 3.3 per cent at $55.50 in premarket trading.

Chief executive Jamie Dimon struck an upbeat note, however. "We have growing confidence in the economy - consumers, corporations and middle market companies are in increasingly good financial shape and housing has turned the corner in most markets...," he said in a statement.

Mr Dimon has been pushing to improve the bank's profitability after net income dropped 16 percent last year due to massive legal settlements and rising costs to improve compliance with laws and regulations.

JPMorgan’s revenue from fixed-income fell 21 per cent to $3.8 billion in the quarter ended March 31st, while revenue from equity markets fell 3 per cent to $1.3 billion. Some investors worry about how much of the big banks’ revenue streams from fixed-income trading have been lost forever as a result of changes ordered by regulators to make the banking system safer.

JPMorgan’s annual costs to comply with laws and regulations and control risk have increased by about $2 billion. JPMorgan, the first big investment bank to report for the quarter, said non-interest expenses fell 5 per cent in the latest quarter to $14.6 billion.