JPMorgan Chase (JPM), the biggest U.S. bank by assets, said Tuesday that second-quarter profit fell 8 percent after customer stock and bond trading volume dropped and mortgage lending fees plunged.
The results weren't as bad as investors had feared, and the bank's shares rose 4.2 percent to $58.67 in morning trading.
Chief Executive Officer Jamie Dimon said the bank had seen "encouraging signs" across its businesses toward the end of the quarter, including businesses drawing more from credit lines. But the bank's executives also sounded notes of caution, noting that it was "too early to assume that this momentum will continue."
Speaking on a conference call with analysts, Dimon said that companies still aren't stepping up capital spending. On a conference call with reporters, Chief Financial Officer Marianne Lake said the pickup in bond trading revenue that the bank saw in June has not continued through July.
The report is the bank's first since Dimon disclosed that he had throat cancer.
Dimon told reporters Tuesday, "I feel great," and added that he would stay engaged with the business as he underwent treatment. He said for the first time that he was advised to take a few weeks of rest after his eight weeks of treatment.
The bank's net income fell to $5.99 billion, or $1.46 a share, from $6.5 billion, or $1.60 a share, in the same quarter of 2013. Revenue fell 3 percent to $24.45 billion.
Analysts on average had expected earnings of $1.29 a share, according to Thomson Reuters I/B/E/S.
Revenue from fixed-income and equity markets fell 15 percent to $3.5 billion in the quarter ended June 30 compared with the year-earlier quarter, but the drop was less than projected.
Executives had said during the quarter that capital markets revenue was running about 20 percent less than a year earlier, and below expectations at the start of the year.
Goldman Sachs Group (GS), which also reported Tuesday, said quarterly earnings rose 5 percent, powered by its investment and lending business. Income from fixed income, currency and commodities fell 10 percent.
Citigroup (C), which reported Monday, said income from stock and bond trading fell 15 percent, excluding an accounting adjustment -- well below the 20-25 percent fall it had braced the market for in May.
JPMorgan executives have said that institutional investors seem to be shying away from bonds because of a lack of strong opinions about future moves in interest rates and currencies.
Investment banking fees rose 3 percent to $1.8 billion, driven by a 31 percent rise in advisory fees as strong equity markets encouraged deals and capital-raising.
JPMorgan has also been increasing its focus on wealth management, and private banking revenue rose 5 percent to $1.6 billion as client assets rose 15 percent to $2.5 trillion.
Mortgage Lending Drops
JPMorgan, the second largest U.S. mortgage lender after Wells Fargo (WFC), said its profit from mortgage lending fell 38 percent to $709 million, while mortgage application volumes dropped 54 percent to $30.1 billion.
Overall U.S. mortgage lending has fallen for the past 15 months as mortgage rates have risen. Demand for loans was also hit by a weaker spring selling season compared with last year.
Non-interest expenses fell 3 percent to $15.43 billion.
JPMorgan said total assets at end-June stood at $2.52 trillion, up from $2.48 trillion at the end of March.
6 Little Changes You Can Make to Save Big Bucks
JPMorgan Profit Slips 8% as Securities Trading Income Drops
Most of us spend a ton of time researching our options when we first sign up for a plan or policy, then forget all about it and make monthly payments like a robot. But this can cost you.
If you've been on the same cell phone plan for a while, or you haven't looked at the terms of your insurance policies (home, life, auto) since you got them, it's time to do a review. Your circumstances may have changed, and new plans or deductions may have come out since you first signed up. Call up customer service (or your agent) and have them walk you through your options if you're having trouble comparing things on your own.
One of the biggest budget sucks is our own forgetfulness. We miss payments and incur late fees because we've misplaced our statement or didn't manage to get our mail out in time. We fail to save as much as we'd like because we just never remember to do it.
The easiest way to save yourself some money (and hassle and stress) is to set it and forget it. Sign up for auto-pay so your monthly bills are automatically deducted from your checking account. Have a certain amount automatically transferred each month from your checking to your savings account. Remove the human error factor, and your budget will be better for it.
We charge so much nowadays -- whether on credit cards or debit cards -- that it's easy to spend a lot of money without really registering it. When you have a set amount of bills in your wallet, however, it's extremely easy to see how much you've spent so far this month and how much is left.
Take those budget categories of yours -- groceries, entertainment, etc. -- and turn them into real, physical envelopes. At the beginning of each month, put that month's allotment of cash into each envelope. When you're running low, you'll know you need to be careful with your purchases. When you're out, you're done spending on that category till next month.
If you're prone to impulse purchases, imposing a waiting period on yourself is an easy way to break the cycle.
For large purchases, a 30-day waiting list is best. Write down the item that's calling to you, then wait 30 days before allowing yourself to buy it. You may realize in that time that you don't need it after all. Or you may forget why it called to you in the first place.
For smaller impulse buys, like that fancy new product you spotted in the grocery aisle, follow a 10-second rule. Before the item can go into your cart, spend 10 full seconds asking yourself if you really need it and how you will use it. Simply analyzing why you're getting something can disrupt the siren call of a product.
It's all too easy to blow $5, $10, even $20 on something, whether it's an extra meal out or a coffee on the run. In the grand scheme of things, it "doesn't seem like much" to us. But if you start thinking of your money in terms of the time it took you to earn that money, suddenly you find yourself evaluating your spending choices a little closer.
Figure out what you make per hour if you're salaried (if you're hourly, this will be easy). Let's say you make $15 per hour. For every $15 you spend, you'll have to spend another hour of your time at work to pay for that item. A coffee a day for a week can cost you an hour or two. And bigger items, like that flat screen TV you're eyeing? You get the drift. Framing purchases in light of time spent can help you make sure something is worth it.
In the end, a budget is simply a means of making sure your money is working for you. It allows you to see how much you're brining in and allocate it towards the things that are most important to you. If you can hold those bigger goals in mind, everyday budgeting becomes easier.
If you're wondering whether or not to buy something, ask yourself if that money would be better spent towards your big goal. Put a visual reminder in your wallet to keep you on task-like a photo of a sandy beach if you're trying to save up money for a trip. Viewing your budget in terms of what it will allow you accomplish-not the things it won't allow you to buy, can revolutionize your spending.