Sharp drops in revenue in investment banking and fixed-income trading hurt profit at the U.S.' largest bank. Fred Katayama reports.
JPMorgan Chase kicked off earnings season for banks with its first drop in quarterly profit in five quarters - down 6.7 percent. Revenue also fell. Hurting the U.S.' largest bank: huge drops in revenue in investment banking and fixed-income trading. Calling the markets "challenging," CEO Jamie Dimon said he's "cautious" about the second quarter but noted, "The U.S. consumer remains healthy and consumer credit trends are favorable." The slide in commodity and oil prices also impacted the bank. JPMorgan nearly doubled the money it set aside for potentially bad loans tied to the energy and mining sectors. RBC Capital markets analyst Gerard Cassidy said, "Assuming the energy loan loss reserve build will be moderate for the remainder of the year and the Federal Reserve raises interest rates, JPMorgan's earnings will be stronger in subsequent quarters than the first quarter." The bank faces another challenge: a report from regulators ruled its plans for winding down operations without public money during a financial crisis were not credible. Investors focused on the better than expected results, pushing the stock higher in early trading. Bank of America and Wells Fargo report results Thursday.