JPMorgan Chase & Co, the biggest US bank by assets, reported a 6.4 percent decline in revenue and profit declines in three of its four main businesses, underscoring how weak trading markets and low interest rates have hurt banks in recent months.
The lender, kicking off third-quarter results for big US banks, managed a 22 percent rise in net income but this was mainly due to a tax benefit and lower spending on employee pay.
Net income applicable to common stockholders was $6.27 billion, or $1.68 per share, up from $5.13 billion, or $1.35 per share in the same period last year.
Analysts on average had expected earnings of $1.37 per share, according to Thomson Reuters I/B/E/S. It was not clear if the reported results were comparable.
The results in the latest quarter included tax benefits of $2.2 billion. The prior-period results included legal expenses of $1 billion, which had reduced earnings per share by 26 cents.
The bank, whose shares were down slightly in extended trading on October 13, said net income fell in its commercial banking, asset management, and corporate and investment banking businesses. The only unit to post a higher profit was consumer and community banking, where net income rose 4 percent.
Total revenue fell a more-than-expected 6.4 percent to $23.54 billion. Analysts had expected revenue of $23.69 billion.
Revenue from trading fixed income, currencies and commodities fell 22.6 percent to $2.93 billion. Adjusted for the sale of a physical commodities business and other changes, revenue from fixed-income trading would have fallen 11 percent.
"We saw the impact of a challenging global environment and continued low rates reflected in the wholesale businesses' results, while the consumer businesses benefited from favourable trends and credit quality," CEO Jamie Dimon said in a statement.
Like other banks, JPMorgan has been struggling to increase revenue in the face of weak demand for loans and low interest rates, which have been pinned near zero for overnight funds since December 2008.
Trading was particularly volatile during the quarter as worries about the impact of an economic slowdown in China roiled financial markets, discouraging investors from making big bets and muddying the outlook for US interest rates.
The US Federal Reserve held off on an interest rate rise that many had expected in mid September, citing worries about global growth, jittery markets and muted inflation.
Low interest rates compress the spread between banks' cost of funds and the interest earned from loans and securities.
Noninterest expenses fell 3 percent to $15.4 billion, while provision for credit losses fell 10 percent to $682 million.
Compensation costs fell 6.5 percent to $7.32 billion.