JP Morgan Chase, America's largest bank by assets, surpassed expectations with its quarterly profits yesterday, with the chief executive, Jamie Dimon, speaking of signs that the US was “healthy and getting stronger” – although a note of caution about small businesses hinted at a still uncertain outlook for the world's largest economy.
The bank, which has faced intense scrutiny and criticism for the so-called "London Whale" trading debacle last year that left it nursing a $6bn-plus loss, reported net income for the first three months of 2013 of a record $6.5bn (£4.2bn), against $4.9bn in the corresponding period last year.
While that was well ahead of market expectations, JP Morgan's revenues were slightly short of market hopes, at $25.8bn. Analysts had expected $600m more in revenues, which would have brought the figure closer to the $26.8bn result last year.
Underpinning the profits was a programme of cost-cutting, and gains in the bank's investment banking arm and retail business, where mortgage originations climbed strongly compared to the year before. However, the growth in the latter wasn't as strong compared to the fourth quarter of last year – up 3 per cent – and Mr Dimon conceded that "loan growth across the industry has been softer this quarter," even though year on year growth "remained strong".
"Small businesses remain cautious about the recovery and fiscal uncertainty, and are not investing their capital," he noted.
His comments come against the backdrop of a budget impasse in Washington, where Republicans and Democrats remain at odds about how to cut the deficit.
A starker reminder of the still uncertain economic outlook came from Wells Fargo, which also posted results yesterday. Although first-quarter profits were up 23 per cent, the bank benefited from a cost-cutting drive, and its mortgage business showed signs of a slowdown.
At JP Morgan, meanwhile, attention also turned to questions over Mr Dimon's dual role as chairman. The bank is believed to be lobbying shareholders to vote against a non-binding proposal at its annual meeting next month that calls for Mr Dimon to be stripped of the title.