JPMorgan Chase & Co., the biggest U.S. bank, said first-quarter profit climbed 12 percent on rising revenue from fixed-income trading.
Net income increased to $ 5.91 billion, or $ 1.45 a share, from $ 5.27 billion, or $ 1.28, a year earlier, according to a statement Tuesday from New York-based JPMorgan. Thirty-one analysts surveyed by Bloomberg estimated per-share earnings of $ 1.41.
Trading revenue had a "very strong" start to the year as higher volatility boosted volume, Daniel Pinto, chief executive officer of JPMorgan's investment bank, said in February. Wall Street firms contended with falling trading revenue last year amid unusually calm markets.
"We expected an improvement in fixed-income trading revenues," Pri de Silva, senior banking analyst at CreditSights Inc. in New York, said before results were released. "That should bode well" for competitors including Goldman Sachs Group Inc., Morgan Stanley and Citigroup Inc., de Silva said.
Higher capital requirements prompted JPMorgan, the world's biggest investment bank, to lower its target for returns at that business to 13 percent from 15 percent, according to a February presentation. The firm is also considering whether to shrink in areas including interest-rates trading and prime brokerage because of the new capital rules, Pinto has said.
JPMorgan shares trade at a discount to the estimated valuations of its four main businesses, leading analysts including Richard Ramsden of Goldman Sachs to examine whether the firm would be worth more split into pieces.
The bank's valuation is hurt by uncertainty around future legal costs, CEO Jamie Dimon said last week in his annual letter to investors. The firm, which has posted more than $ 36 billion in legal costs since the financial crisis, may see those expenses "normalize" by 2016, he said.
"Though we still face legal uncertainty, particularly around foreign-exchange trading, we are determined to reduce it," Dimon said in the letter.
Last year, the company settled regulatory claims that traders sought to rig foreign-exchange benchmarks. The Justice Department's related case is still open.
Wells Fargo & Co., the biggest U.S. mortgage lender, is also scheduled to report results today. Bank of America Corp., the second-biggest U.S. bank by assets, and No. 3 ranked Citigroup will report later this week.
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