JPMorgan Chase’s 2Q profits beat expectations

It still pays to be big on Wall Street.

JPMorgan Chase, the biggest U.S. bank by assets, said it earned $6 billion in the second three months of the year, or $1.46 per share. That handily beat the $1.31 a share that analysts were expecting the bank to earn.

The profits were down slightly from the second quarter a year ago, when the bank earned $6.5 billion, but are still within arm’s length of some of JPMorgan’s best quarters in its history. Revenue was down 3% from a year ago to $24 billion.

Pushing the bank above estimates appeared to be the fact that the bank’s Wall Street stock and bond trading units were not hit as badly as many, including JPMorgan (JPM) executives, had predicted.

Low volatility in the stock and bond market this year has slowed trading volumes and made it tough for the Wall Street to make money in the market. The trading operations have also been limited by new rules that limit risk taking by big banks. JPMorgan said revenue in its markets and investor services business fell 12% from a year. Analysts had been expecting a bigger drop.

The bank also increased its lending by $16 billion in the quarter. And while other banks have had trouble attracting deposits, JPMorgan is still having no difficultly bringing money into its bank. Deposits rose nearly $40 billion from a year ago, and are up nearly $100 billion in the past year.

“We see a modestly improving economy that is modestly getting better,” chief executive Jamie Dimon told a conference call.

That was visible in the bank’s provisioning: new reserves for possible loan losses fell by around $150 million from the first quarter to just under $700 million, while the bank was also able to release $300 million in old reserves against mortgage loans that it had thought might go bad.

Despite the good quarterly results, some investors might be wary of betting on JPMorgan right now. On July 1, the bank’s CEO Jamie Dimon announced that he would soon undergoing treatment for throat cancer. The bank hasn’t said how it will distribute his responsibilities during the treatment.

Dimon told the conference call that he was feeling great, and that the cancer was caught early and has not spread. Still, the company does not appear to have a clear candidate to replace him. The CEO said JPMorgan’s board has a number of good choices for the bank’s next CEO, but implied that the actual successor has not been picked.


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