JPM JP Morgan Chase and Co

By David Benoit 

JPMorgan Chase & Co. on Friday said its profit rose 5% and topped expectations on the strength of its consumer bank.

The nation's largest bank by assets reported a profit of $9.18 billion, or $2.65 a share. Revenue rose to $29.12 billion from $27.91 billion a year ago.

Analysts polled by Refinitiv had expected earnings of $2.35 a share and revenue of $28.44 billion.

Shares rose about 3% to $109.36 in premarket trading after the results were announced. The report also helped set a positive tone for the broader stock market as futures on both the Dow Jones Industrial Average and S&P 500 rose more than 0.5%

Banks had been cheering rising interest rates, which typically allow them to book more profits on loans. But the Federal Reserve, which had been raising rates since late 2015, signaled last month that it is unlikely to lift them this year. That shift sent bank stocks sliding and led analysts to cut profit expectations for JPMorgan and other big banks.

The bank said its net interest income, the amount it makes on lending minus what it pays out on deposits, rose 9% to $14.45 billion.

JPMorgan executives had also warned there was a slow start to the year for its investment bank.

Trading revenue fell 17% to $5.47 billion from $6.57 billion a year earlier. Fixed-income revenue slid 18% while equity revenue fell 14%. Investment-banking revenue offset some of the pain, rising 10%. The entire investment bank's profit dropped to 18% to $3.25 billion.

In the consumer bank, profit jumped 19% to $3.96 billion. The bank's core consumer loan volume rose 3% and the margins it made jumped, with card spending driving the gains. Mortgage lending revenue fell 11%.

The commercial bank earned $1.05 billion compared with $1.03 billion the prior year, and the bank's asset and wealth management unit made $661 million, down from $770 million a year earlier.

Costs increased 2% to $16.4 billion as the bank has said it would continue putting money into technology and expansion, including its first branch openings in years.

Return on equity, a key measure of profitability, was 16% in the first quarter compared with 15% a year ago.

The bank's total core loans rose 2% to $942.7 billion.

Credit quality continued to be strong for the bank, as it put aside $1.5 billion for potential losses on its loans, compared with $1.17 billion a year earlier. The charge-off rate, the amount it doesn't expect to collect, fell to 0.59% of total loans from 0.61% a year ago.

Write to David Benoit at david.benoit@wsj.com

(END) Dow Jones Newswires

April 12, 2019 08:58 ET (12:58 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.