Mixed results from the top banks: JPMorgan Chase boosted profit despite lower revenue; Wells Fargo's profit fell for the second straight quarter. Fred Katayama reports.
Mixed results from two of the U.S. largest banks kicking off the earnings season. JPMorgan Chase surprised Wall Street by boosting quarterly profit 5 percent despite a fall in revenue. It achieved that by cutting costs. The nation's largest bank slashed mortgage banking costs and legal expenses. And it has been reportedly reducing staff. As expected, revenue fell but beat analysts' expectations. Fixed income trading revenue dropped sharply. The downturn in bond trading markets last month is expected to hurt trading results at other banks, too. On the plus side, JPMorgan was also able to grow investment banking revenue. RBC Capital Markets analyst Gerard Cassidy said, "Overall, the quarter was generally strong with the Consumer & Community Bank leading the performance.... JPMorgan continues to make headway on reducing expenses and simplifying its businesses." An opposite result at Wells Fargo. Profit fell for the second straight quarter as costs rose, even though the bank managed to boost revenue. Like Morgan, it boosted provisions for credit losses. Its revenue rose across the board. The bank wrote more home loans in the quarter but applications fell. The nation's largest mortgage lender, Wells is seen as a barometer for the housing market, and the housing business typically strengthens in the spring quarter. Shares of Wells Fargo fell in early trading. JPMorgan shares rose.