JP Morgan says it posted record revenue and profits for the first three months of 2018, thanks to results from stock trading. Revenue jumped 13% as volatility rose in the first three months.
Equities trading accounted for $2.02 billion of revenue, making the figure a 26% gain, beating analysts’ estimates. Bond trading in the quarter rose 8% to $4.55billion, while fixed-income revenue was flat, excluding one-time gains according to the bank.
The banks net income jumped 9% to $13.5 billion. JPMorgan is reportedly expecting net interest income to be as much as $55 billion for the year. Analysts say the fact behind the figures is that borrowers are charged more due to rising interest rates, which is beneficial for the banks but at the same time banks keep deposit rates low.
Due to the President Trumps administration tax overhaul, tax rate for the quarter was 18%, down from 23% earlier in the quarter. In January the bank estimated that its tax rate would be at 19%, but it said it’s effective tax rate will be about 20% this year.
The bank forecasted in February that higher U.S. interest rates and lower corporate interest rate, put in place by the Federal Reserve, will ultimately bring about $7billion more in pretax profit in the coming years.
Based on projections in February, especially due to new corporate tax cuts, JPMorgan’s profit for 2018 may be a third higher that 2017. CEO Jamie Dimon plans to invest some of this profit in technology, expansion in way of a new headquarter in midtown Manhattan, and opening over 400 new branches.
Dimon in a statement said that 2018 has got off to a good start for the bank, with all its businesses performing well across the board.
Its shares are already up by 5.3% so far this year.
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