Two of the US’s largest banks released first-quarter results on Tuesday and gave a mixed picture of the state of the banking industry.
JP Morgan Chase, the US’s largest bank by assets, announced profits had risen by 12% over the quarter, due in part to strong trading results. Wells Fargo, the fourth-largest bank by assets but the largest mortgage lender, announced a dip in profits as it struggled to make money in lending.
JP Morgan reported a profit of $5.91bn, up from a profit of $5.27bn in the same period of 2014. Revenue rose 4.1% to $24.82bn. The numbers were better than analysts had predicted.
The results were powered by a strong performance from the bank’s traditional Wall Street businesses. Trading revenue increased 9% to $5.67bn from the first quarter. The bank also benefitted from the pick-up in mergers and acquisitions. Merger advisory revenue rose 42% from a year ago.
The banking giant also reported a strong quarter for lending. JP Morgan extended $24.7bn in mortgages in the quarter, an increase of 45% from the $17bn the bank extended in the first quarter a year ago.
Wells Fargo’s results were more disappointing. The US’s largest mortgage lender ended 18 consecutive quarters of higher profits on a year-on-year basis on Tuesday, reporting a profit of $5.8bn for the first quarter, down from $5.89bn in the same period of 2014. The first quarter of 2014 was a record quarter for Wells Fargo and was boosted by a one-off tax gain.
Wells Fargo set aside $608m in the quarter ended 31 March to cover potentially bad loans. That compares with $325m in the first quarter of 2014.
The bank has been beefing up its investment banking divisions in recents years. Fees from investment banking rose 36% compared to last year to total $445m.
