Profit fell at some of the U.S.' biggest banks, but strong trading results helped lift JPMorgan Chase's and Citigroup's revenue past estimates. Fred Katayama reports.
Strong trading results overshadowed weaker bottom lines at some of the U.S.' biggest banks. JPMorgan Chase saw fixed income revenue spike nearly 48 percent. It benefited from the volatility spurred by Britain's vote to exit the European Union and changing expectations for monetary policy. Also contributing: investment banking, which was driven by higher debt and equity underwriting fees. JPMorgan's profit dropped because of higher tax expenses, but earnings and revenue crushed estimates, sending its shares higher in early trading. Oppenheimer analyst Chris Kotowski said, "JPMorgan Chase had an excellent quarter which we think casts further doubt on skeptics' views that bank earnings are somehow frail and fragile." Profit also dropped at Citigroup and Wells Fargo amid the low interest rate environment. But Citi's trading revenue rose sharply, and overall revenue breezed past Wall Street's estimates, sending shares higher. Wells Fargo's profit fell for the fourth straight quarter. The bank set aside funds for potential legal expenses stemming from the scandal in which employees opened 2 million fake accounts to meet aggressive sales targets.