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JPMorgan Chase's quarterly profit rises 10% as expenses kept in check

JPMorgan Chase & Co is the first US bank to report results since the Fed raised rates for the first time since 2006
JPMorgan Chase & Co is the first US bank to report results since the Fed raised rates for the first time since 2006

JPMorgan Chase & Co, the biggest US bank by assets, reported a 10.2% rise in profit for the last quarter of the year as it kept a tight lid on expenses. 

The bank's net income rose to $5.43 billion in the three months ended December 31 from $4.93 billion a year earlier. 

JPMorgan is the first big US bank to report results since the Federal Reserve raised its key interest rate for the first time since 2006 on December 16. 

Higher interest rates are usually good for banks, allowing them to charge higher rates on loans. 

Citigroup and Wells Fargo & Co, the third and fourth biggest US banks, are due to report results tomorrow. 

The bank said its total revenue on managed basis rose about 1% to $23.75 billion. Revenue from fixed-income trading, usually JPMorgan's most volatile business, fell 3% to $2.57 billion. 

Adjusted for the sale of a physical commodities business and other changes, revenue from fixed-income trading would have fallen 1%. 

"The businesses generated strong loan growth and credit quality, except for some stress in energy," the bank's chief executive Jamie Dimon said in a statement. 

US banks, like their global counterparts, had a tough year as falling oil prices and worries about slowing growth in China contributed to weakness in global credit markets, discouraging investors from making big bets.

Legal charges and the costs of meeting stricter capital requirements since the financial crisis have also weighed on the lenders. 

And even with the Fed rate hike, US interest rates remain near historic lows. That has meant that cost cutting - the one thing banks can best control - has become a main driver of profits.