JPMorgan Chase Posts Profit That Beats Estimates

JPMorgan Chase & Co the largest bank by assets in the U.S. said its profit for the second quarter dropped 1.4%, but beat estimates by analysts as its revenue from fixed income trading and growth in loans increased.

The banks net income fell to just over $6.2 billion equal to $1.55 per share compared to last year during the same quarter of $6.29 billion equal to $1.54 per share.

Excluding one adjustment made in accounting as well as a legal benefit, JPMorgan earnings reached $1.46 per share, which was 3 cents higher than estimates by analysts.

Revenue was higher by 2.8% to just over $25.2 billion, which beat Wall Street estimates of more than $24.5 billion. The company announced that its average core loans grew by 16% from the same period last year.

The figure for revenue included more than $3.96 billion received through fixed-income trading, an increase of 35%, beating the estimate of $3.57 billion. The bank’s equity trading increased by 1.5% to end the quarter at $1.6 billion.

JPMorgan is kicking off the U.S. banks earnings season and might give some insight into the prospects for the industry for advisory and trading operations after the surprise vote in the UK last month to exit the European Union.

While executive at JPMorgan said that trading had rebounded during both April as well as May that was previous, to the referendum vote that roiled the markets and pushed aside expectations for more U.S. rate hikes to at least 2017.

The delay would extend the post financial crisis period of low rates that have forced banks to look for cuts in expenses to withstand stagnant revenue.

Stocks in banks plummeted following the Brexit vote while yields on Treasury notes that are 10-years fell to new records, draining the financial companies of their interest income.

JPMorgan, which took losses of close to 10% over a period of two days following the referendum vote on June 23, has recovered since that time the majority of its loss.

Non-interest expenses dropped by 6% to just over $13.6 billion due to lower bills in the legal department and cost cutting. That compared to an estimate of $14 billion by analysts.

Earnings at the investment and corporate bank climbed over 6.5% to more than $2.49 billion as its revenue increased over 5.1% from the same period a year earlier.

Revenue from markets, which includes stock and bond trading, increased 23%.

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