J.P.. Morgan Chase reported that first-quarter record profit and revenue exceeded analysts' expectations as the bank benefited from higher interest rates.
The shares rose by 2.5 percent in pre-market trading.
"We had record sales and net income, a strong performance in all of our core businesses and a more constructive environment," said Chief Executive Officer Jamie Dimon in a statement.
"Despite some geopolitical global insecurity, the US economy continues to grow, employment and wages are rising, inflation is moderate, financial markets are healthy, and consumer and corporate confidence remains strong," he added.
J.P.. Morgan, the largest US bank, is the first major lender to make a profit. Their findings may dispel fears about the sector after the Federal Reserve signaled that interest rate hikes were suspended for the remainder of the year. Combined with signs of global economic slowdown, the central bank's actions have punished bank stocks as the reverse yield curve ruffles the industry's profit margins and signals a possible recession on the horizon.
The results of J.P. Morgan showed, however, that it was still benefiting from the Fed's latest move to raise policy rates in December, the fourth time last year.
This was most evident in the bank's consumer finance department, one of the company's two largest segments. Earnings increased 19 percent to $ 3.96 billion and revenue increased 9 percent to $ 13.8 billion. The division increased the deposit margin and increased credit between credit card and car units. The provision for credit losses remained unchanged year-on-year at $ 1.3 billion.
Directed by Dimon since 2005, the company continues to outperform analysts' earnings expectations. In the fourth quarter, the bank was below expectations after exceeding expectations for 15 consecutive quarters of heavy trading results.
The bank announced in February that first quarter trading revenue was targeted at a percentage decline in "high teens" compared to the prior year, as both the equity and the bond banks struggled with slower client activity.
This warning was true. In the investment bank of J.P. Morgan, the world's largest-selling investment bank, saw first-quarter trading revenue tumble 17 percent to $ 5.5 billion. Excluding the impact of a year-over-year change in accounting, bond trading declined 8 percent and stock trading 13 percent. Revenue from the banking sector increased 8 percent to $ 3.2 billion due to higher fees for underwriting debt and advisory fees. The entire division's $ 3.25 billion profit was 18 percent lower than the previous year.
J.P.. Morgan's Asset Management Department said earnings fell 14 percent to $ 661 million at lower market levels and brokerage activity in the quarter. The company's commercial bank generated a profit of $ 1.05 billion, 3 percent more than a year earlier.
Nevertheless, the bank has continued to make long-term investments in its business. JP Morgan said it would expand its branch network to nearly the entire US population by 2022. It also announced the first cryptocurrency from a major US bank and committed $ 350 million to improve employment prospects for people in underserved communities.  Following expects Wall Street:
Profit: $ 2.35 per share, a decline of 0.7% over the previous year (Refinitiv).
Revenue: $ 28.4 billion, a decrease of 0.3% over the previous year.
Net interest margin: 2.57%, according to FactSet
Trading Turnover: Fixed income USD 3.64 billion, shares $ 1.76 billion