JPMorgan Chase & Co today reported a better than expected quarterly profit as gains from higher interest rates and loan growth more than offset a drop in bond trading.
The lender is the biggest US bank by assets.
Trading revenue fell for the first time in five quarters as volatility hit multi-year lows, but the drop was not as bad as expected by a company executive in the run-up to the results.
Executives at big banks warned in recent weeks that trading revenue for the quarter would be down from a year earlier, when client trading surged around UK's Brexit vote.
The quarter benefited from the Federal Reserve raising interest rates for the second time this year in June.
The target range for overnight interest rate now stands at 1-1.25%, compared with 0.25-0.5% a year earlier.
"We continued to post very solid results against a stable-to improving global economic backdrop. The U.S. consumer remains healthy," chief executive Jamie Dimon said in a statement.
The bank's net income rose 13.4% to $7.03 billion in the second quarter ended June 30.
Excluding a gain from a legal settlement, the company earned $1.71 per share, compared with analysts' average estimate of $1.58 per share, according to Thomson Reuters.
The bank said its markets revenue fell 14%, led by a 19% decrease in fixed income markets revenue to $3.22 billion.
Mortgage lending continued to be a dark spot in the bank's results as higher interest rates kept borrowers from refinancing. Mortgage fees and loan servicing revenue fell about 41% to $404m.
Net interest income rose 7.6% to $12.21 billion, primarily driven by loan growth and the higher rates.
Rising interest rates are usually good for banks, allowing them to increase how much they charge for loans faster than they increase how much they pay for deposits.
JPMorgan's non-interest expenses rose to $14.51 billion, up from $13.64 billion a year earlier.
At the end of May, the bank's chief financial officer Marianne Lake had estimated expenses of less than $14.5 billion in the quarter.
Wells Fargo & Co and Citigroup also reported quarterly results today.
