JPMorgan Chase & Co. (NYSE:JPM) has experienced a 12% increase in profits in the first quarter of 2015, with contributing factors being increased volatility in the FX market, and a marked improvement in fixed income trading revenue.
As North America’s largest financial institution, the return to form by JPMorgan Chase bodes well for the institutional and interbank FX trading sector in the United States, a region where these two industry sectors have flourished since the dawn of electronic trading.
Yesterday, JPMorgan Chase released its full financial results for the first quarter of 2015, depicting a net income of $5.9 billion, OR $1.45 per shre, on revenue of $24.8 billion, and a 14% return on tangible common equity.
Whilst retail and commercial banking was up noticably, revenue from the firm’s markets & investor services operations was $6.5 billion, up 7% from the prior year, despite the impact of business simplification, driven by higher markets revenue.
Excluding the revenue decline related to business simplification, total markets and fixed income activity would each have been up 20%. Equity Markets revenue was up 22%. Macro events drove robust client activity in fixed income markets including in currencies & emerging markets, and rates, as well as in equity markets.
Throughout the company’s entire operations, net income was $598 million, which is relatively flat compared with the prior year. Net revenue was $1.7 billion, an increase of $64 million compared with the prior year, driven by higher noninterest revenue on record gross investment banking revenue.
Net interest income was $1.1 billion, down slightly compared with the prior year, reflecting spread compression on loan and liability products, largely offset by higher balances. Noninterest expense was $709 million, up $23 million compared with the prior year, driven by higher investment in controls.
The provision for credit losses was $61 million, $56 million higher than the prior year, driven by higher reserve build predominantly related to Oil & Gas exposures and net charge-offs in the current period compared with net recoveries in the prior year.
The increase in profits is remarkable when considering that the firm was subject to a $687 million legal expense.
The bank is one of several facing further investigations from US regulators over foreign exchange manipulation following the conclusion by US, Swiss and British regulators last year regarding the global FX benchmark manipulation investigation which cost six banks a collective $4.3 billion.
Investor confidence remains high as share prices traded up considerably following the issuing of the firm’s quarterly results.
For the official report from JPMorgan Chase, click here.