JPMorgan Chase & Co <JPM.N>, the biggest U.S. bank by assets, reported an 8 percent decline in second-quarter profit as a pullback in trading of bonds and currencies by big institutions hit revenue in its securities trading business.
Still, the results beat market expectations and the bank's shares rose 3 percent to $57.96 in premarket trade on Tuesday.
"Toward the end of the second quarter, we saw encouraging signs across our businesses including an uptick in wholesale utilization, strengthening pipelines in our commercial and business banking segments, and some improvements in markets activity," Chief Executive Jamie Dimon said in a statement.
The report is the bank's first since Dimon disclosed that he had throat cancer.
Dimon, in a call with reporters, said on Tuesday that he felt "great" and would stay engaged with the business as he underwent treatment.
The bank's net income fell to $5.99 billion, or $1.46 per share, from $6.5 billion, or $1.60 per share, in the same quarter of 2013. Revenue fell 3 percent to $24.45 billion.
Analysts on average had expected earnings of $1.29 per share, according to Thomson Reuters I/B/E/S.
Revenue from fixed-income and equity markets fell 15 percent to $3.5 billion in the quarter ended June 30 compared with the year-earlier quarter, but the drop was less than projected.
Executives had said during the quarter that capital markets revenue was running about 20 percent less than a year earlier, and below expectations at the start of the year.
Goldman Sachs Group Inc <GS.N>, which also reported on Tuesday, said quarterly earnings rose 5 percent, powered by its investment and lending business. Income from fixed income, currency and commodities fell 10 percent.
Citigroup Inc <C.N>, which reported on Monday, said income from stock and bond trading fell 15 percent, excluding an accounting adjustment - well below the 20-25 percent fall it had braced the market for in May.
JPMorgan executives have said that institutional investors seem to be shying away from bonds because of a lack of strong opinions about future moves in interest rates and currencies.
Investment banking fees rose 3 percent to $1.8 billion, driven by a 31 percent rise in advisory fees as strong equity markets encouraged deals and capital raisings.
JPMorgan has also been increasing its focus on wealth management, and private banking revenue rose 5 percent to $1.6 billion as client assets rose 15 percent to $2.5 trillion.
MORTGAGE LENDING DROPS
JPMorgan, the second largest U.S. mortgage lender after Wells Fargo & Co <WFC.N>, said its profit from mortgage lending fell 38 percent to $709 million, while mortgage application volumes dropped 54 percent to $30.1 billion.
Overall U.S. mortgage lending has fallen for the past 15 months as mortgage rates have risen. Demand for loans was also hit by a weaker spring selling season compared with last year.
Wells Fargo, which reported last Friday, said its mortgage revenue dropped 39 percent in the quarter.
Non-interest expenses fell 3 percent to $15.43 billion.
JPMorgan said total assets at end-June stood at $2.52 trillion, up from $2.48 trillion at the end of March.