JPMorgan Chase & Co, the biggest US bank by assets, reported a better than expected rise in quarterly profit today as revenue from fixed-income trading rebounded.
Trading picked up early in the quarter after the Swiss National Bank shocked currency markets by scrapping a three-year-old cap on the Swiss franc without warning, causing the currency to soar against the euro.
Revenue from trading fixed income, currencies and commodities (FICC) rose 5% to $4.07 billion, adjusted for the sale of businesses last year.
JPMorgan's investment bank, which includes FICC trading, is the biggest in the world by revenue according to research firm Coalition.
But the unit has been under pressure to cut costs because customers have reduced their trading since the financial crisis and regulators have demanded that big banks take fewer risks, hold more capital and improve controls.
JPMorgan is the first of the large US banks to report quarterly results.
Overall, results are expected to show that trading profit, debt underwriting fees, and mortgage refinancing volumes were strong, even as low interest rates cut into the profitability of loans.
The bank's net income rose to $5.91 billion, or $1.45 per share, in the first quarter ended March 31, from $5.27 billion, or $1.28 per share, a year earlier.
The results for the latest quarter included an after-tax charge of $487m for legal expenses.
Analysts on average had expected earnings of $1.40 per share, according to Thomson Reuters I/B/E/S. Non-interest expenses in the bank's investment banking division rose to $5.66 billion from $5.6 billion.
JPMorgan has said it wants to cut annual expenses in its investment bank by $2.8 billion by 2017, excluding legal costs, though some of the savings are expected to be offset by more spending to improve risk controls.
Company-wide expenses, adjusted for legal costs, fell by $402m to $14.2 billion. Provision for credit losses rose 12.8% to $959m.
The bank's net interest margin fell to 2.07% from 2.2% as banks continue to increase profits in a low rate environment.
