On Friday, JP Morgan Chase posted earnings for the first quarter that beat both the top and bottom lines, though its growth in trading revenue remained light.
Revenue for the quarter reached $28.52 billion while Wall Street was expecting $27.68. Earnings ended for the quarter at $2.37 per share, while Wall Street was expecting $2.28 per share.
Shares ended Friday down over 2.5% amidst a decline across most bank stocks. Investors expected strong results as evidenced by the stock closing Thursday 2.5% and for the year have increased 6%. The S&P 500 however was down 0.36% year to data after Thursday’s close.
The bank posted a decline of 7% in its revenue from investment banking ending the quarter at $1.6 billion. Fix-income trading sales excluding certain items ended unchanged.
Analysts on Wall Street were expecting close to a 3% increase in revenue the bank’s fixed income, commodities and currencies trading.
CEO at JP Morgan Chase Jamie Dimon said that the year has started strong with the companies performing well in all divisions, driving strong growth on the top line and building on last year’s momentum.
He added that a growth of 13% in client investment assets as well as card sales and volume of merchant processing in double digits was strong for the quarter.
The world economy continues on a strong pace, and the bank is optimistic about the impact of the new tax reform for the U.S. as business sentiment continues to be upbeat, and consumers benefit from both job as well as wage growth, added Dimon.
The bank posted a 15% return on equity for its first quarter, while expenses reached $16 billion.
In its asset and wealth management division, client assets increased 9% to end the quarter at $2.8 trillion.
The bank made distribution to shareholders of $6.7 billion during the first quarter, which was net of any stock issued to its employees.
Results from the first quarter were helped by the lower corporate tax rates as well as JP Morgan adopting a new guidance for accounting in revenue recognition.
Net interest income for 2018 is expected to reach between $54 billion and $55 billion, which is up from its 2017 figure of $51.4 billion.
The bank is building a new headquarters that will be 2.5 million square feet location in New York City.