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JPMorgan Chase & Co. (JPM, Financial), the nation’s largest bank by assets, released its first-quarter 2017 earnings on April 13, reporting a 17% increase in profit from trading.
The company recorded profit of $6.4 billion, or $1.65 a share, up from a profit of $5.52 billion, or $1.35 per share, in the same quarter of 2016. The bank also had a 6% increase in net revenue to $25.6 billion. Net interest income for the quarter grew 6% to $12.06 billion.
The New York-based bank beat estimates on these metrics, causing shares to rise 0.9% in morning trading.
JPMorgan’s trading revenue in the first quarter of the year increased 13% to $5.82 billion, compared to $5.17 billion in first-quarter 2016. The bank attributed a 17% increase in fixed-income trading revenue to higher activity in the trade of government bonds and securities ahead of European elections. Equities trading revenue climbed 1.9%.
Consumer and business banking revenue rose 8% to $4.9 billion as a result of strong deposit growth. In contrast, revenue for the company’s mortgage banking division fell 18% to $1.5 billion due to feeble servicing results. Card, commerce solutions and auto net revenue also declined 3% to $4.5 billion.
In its corporate and investment bank division, JPMorgan reported net income of $3.24 billion, up significantly from $1.98 billion in the same period last year. In the consumer bank division, the company recorded a profit of $1.99 billion, down from $2.49 billion in the prior-year quarter.
JPMorgan’s commercial bank reported a 61% increase in earnings to $799 million from $496 million a year ago. The asset management unit reported a decline in profits from last year to $385 million.
The bank’s costs increased 8.5% to $15.02 million from $13.84 billion a year ago. Legal costs for the quarter were $218 million. JPMorgan allocated $1.32 billion in the quarter for potential losses on loans and released $133 million in business-loan reserves in response to an improving outlook for oil and gas companies. It lost $1.65 billion to loan defaults, 0.79% of its overall portfolio.
With a market cap of $306.8 billion, JPMorgan Chase shares were trading around $86.23 on Thursday morning with a price-earnings (P/E) ratio of 13.9, a price-book (P/B) ratio of 1.4 and a price-sales (P/S) ratio of 3.3.
Among the gurus invested in JPMorgan, Dodge & Cox is the largest shareholder with 0.75% of outstanding shares. In all, 39 gurus hold the stock.
Disclosure: I do not own any stocks mentioned in the article.
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