JPMorgan's earnings rise on lower revenue
JPMorgan Chase (JPM) kicked off second quarter earnings season for banks with improved profit on depressed revenue, suggesting it could be a tough haul for big banks until interest rates rise.
The New York City bank said it earned $6.3 billion, or $1.54 per share in the three months ended in June. That's a rise of 5% over last year's second-quarter earnings of $5.98 billion, or $1.46.
Revenue declined 3.2% to $24.5 billion from $25.3 billion a year ago.
Shares ended up 1.4% to $69.04 as the results beat already dampened expectations. Analysts had expected second-quarter earnings per share of $1.44 on revenue of $24.44 billion, or below last year's results, according to FactSet.
JPMorgan attributed the revenue decline to its mortgage banking business as well as its corporate lending and investment banking business, which has been undergoing "business simplification" efforts.
Indeed, JPMorgan's mortgage banking business reported net income of $584 million, a decline of 20% over last year. Net revenue in that business came in at $1.8 billion, down 21%, due to lower net servicing revenue and lower benefits on mortgage repurchases, JPMorgan said.
Corporate and investment banking, meanwhile, saw revenues decline 6% to $8.7 billion on lower lending revenues and continued weakness in credit and securitized products.
Lower expenses helped JPMorgan in the latest quarter. Non-interest expenses were $14.5 billion, a decline of 6% over last year due to the company's simplification efforts as well as lower legal expenses and lower mortgage banking expenses, the company said. Investment banking revenues were up 4%, however, on higher debt underwriting fees. Asset management revenues were also up, 6% to $3.2 billion, driven by higher loan and deposit balances, JPMorgan said.
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