JPMorgan Chase & Co announced quarterly profits that were weaker than anticipated, as uncertainty about the US economy hindered stock trading and consumer borrowing.
JPMorgan’s revenue from bond trading dropped 21% and Mortgage lending earnings lost 84% from the first three months of 2013.
Most of the bank’s cash cows, including commercial lending and credit cards, posted reduced profits. But the firm views the drop in revenue for its bond trading business as part of a cycle as opposed to a far-reaching fall that will take time to reverse.
“It’s not like selling cereal – it’s not like your volumes go up 2 percent every day,” CEO Jamie Dimon told reporters, adding that the business will expand in the next 10 or 20 years.
“I look at it as doing fine, it’s just not that predictable a business,” Dimon is quoted by The Huffington Post as saying.
Dimon, who was credited with keeping the bank sustainably profitable over the entire duration of the economic crisis, is having a hard time steering it through the current environment.
Friday’s results revealed how the financial institution’s woes go beyond regulatory hurdles and large legal settlements into more core aspects to the business such as trading volumes and loans.
The firm’s net income dropped 19% to $5.27 billion or $1.28 a share, down from $6.53 billion or $1.59 a share within the first three months of 2013, the biggest bank in the US announced on Friday.
Wall Street had estimated per-share earnings of $1.40, according to Thomson Reuters.
The bank’s total revenue sunk 8.5% to $22.99 billion, missing the average forecast of $24.53 billion.
Stocks of JPMorgan, which lately hit $61 to trade at a 13 year-high, plunged 3.1% to $55.63 in afternoon trading.
However, the bank managed to keep costs under control in a manner consistent with weak revenues, saying its non-interest costs were $14.6 billion in the last quarter after sinking 5%, as Reuters reports.
To contact the reporter of the story: Yashu Gola at email@example.com
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