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Upbeat Wells Fargo and JP Morgan a surprise for Wall Street

JP Morgan Chase and Wells Fargo kicked off the Wall Street first quarter reporting season yesterday with better-than-expected results.

Analysts had been predicting a 10 per cent drop in profits at JP Morgan, but the bank, which employs more than 10,000 people in London, made $5.4bn (£3.4bn), only slightly down on the $5.6bn it reported a year ago and much better than the $3.7bn it made in the final quarter of last year.

The forecast-beating performance was driven largely by much-improved results from its domestic mortgage business and a better-than-expected performance at the investment bank. That pushed pay and bonuses sharply higher from the dismal last quarter of last year.

Its chief executive, Jamie Dimon, said: "The firm reported strong revenue for the first quarter of 2012 of $27.4bn, up 24 per cent compared with the prior quarter and up 6 per cent compared with the prior year."

Profits at the investment bank, which last week lost one of its star deal makers in London, Ian Hannam, were down 29 per cent on a year earlier at $1.68bn but more than double the $726m made in the fourth quarter.

That was reflected in the amount paid to JP Morgan's investment bankers, where the average rose to $112,000 for the three months, up from $45,000 in the final quarter of 2012.

Mr Dimon signalled a renewed push for growth: "As we look toward the future, we continue to build our businesses by investing in infrastructure, systems, technology, and new products, and by adding bankers and offices around the world."

He also continued his long-running defence of banks and bankers, saying: "JP Morgan Chase positively impacts the lives of millions of people and the communities in which they live. We are serving them each day, putting our resources and our voices to work on their behalf."

Earning per share rose by 2 cents to $1.31.

Separately yesterday, Wells Fargo reported a higher, first-quarter profit as the fourth-largest US bank set aside less money for bad loans. Its net profits came in at $4.25bn, up from $3.76bn a year ago.

The bank, the largest mortgage lender in the US, said its home mortgage originations rose to $129bn from $89bn a year ago.