JPMorgan Chase and Citigroup expanded quarterly profit more than 7 percent, managing to overcome big drops in trading revenue. Fred Katayama reports.
Quarterly profit rose more than 7 percent at two of the biggest U.S. banks. JPMorgan Chase and Citigroup managed to overcome big drops in trading revenue. The boost from its lending operations and higher net interest income enabled JPMorgan to offset a 21 percent drop in market revenue. Much of that stemmed from a 27 percent plunge in fixed income trading in a quarter marked by low volatility. The bank's CFO said on a conference call that market revenue will likely be lower in the fourth quarter on year-on-year basis. KBW analyst Brian Kleinhanzl said, "Overall, we view JPMorgan's results as a positive read across to trust and custody bank results." Citigroup's trading revenue drop wasn't as steep as JPMorgan's, off 11 percent. Helping boost its profit: the sale of a fixed income analytics and index business and a huge buy back of its shares. Revenue expanded at its consumer banking and investment banking units. Citi's and JPMorgan's results beat forecasts, and both shares opened higher Thursday but drifted lower in morning trading.