JPMorgan, Citigroup Top Wall Street Estimates With Strong First-Quarter Results

Citi posts its best quarterly performance in a decade as its turnaround gains traction

JPMorgan gets a boost from fixed-income trading and investment banking

JPMorgan Chase & Co., the world’s largest bank, reported first-quarter results that topped market expectations, helped by strong revenue from its fixed-income trading and investment-banking businesses. Citigroup Inc. also posted its best performance in a decade as its turnaround efforts gained traction. In premarket trading on April 14, Citigroup shares rose 1.2%, while JPMorgan shares fell 0.6%.

JPMorgan said first-quarter earnings rose 13% to $5.94 a share and revenue increased 10% to $50.54 billion. That exceeded Wall Street estimates of $5.45 a share in earnings and $49.17 billion in revenue.

Revenue from fixed-income trading rose 21% from a year earlier to $7.08 billion, driven by increased activity in commodities, credit, currencies and emerging markets. That was about $370 million above StreetAccount estimates.

Investment-banking fees jumped 28% to $2.88 billion, helped by higher merger-advisory and equity-underwriting fees. That was about $260 million above expectations.

Another reason JPMorgan beat estimates was that it set aside less for loan losses than analysts had expected, CNBC reported.

JPMorgan’s provision for credit losses was $2.5 billion, about $500 million below StreetAccount estimates, suggesting its customers remained financially sound. The bank reduced consumer provisions by $139 million in the quarter, while increasing corporate provisions by $327 million. A year earlier, its provision for credit losses was $3.3 billion.

Banks have benefited in recent quarters from a rebound in investment banking and trading activity, along with steady consumer credit. Trading desks, which connect buyers and sellers of securities and provide transaction financing, have generated strong profits from market volatility. More corporate clients are also pursuing mergers as business prospects improve.

Citigroup posted its strongest quarterly revenue in 10 years in the first quarter. The bank reported earnings of $3.06 a share, up 56%, on revenue of $24.63 billion. Its return on tangible common equity, or ROTCE, rose to 13.1%, the highest since 2021 and above the company’s 10% to 11% target.

Citi said revenue from its fixed-income business, the second-largest on Wall Street, rose 13% from a year earlier to $5.2 billion in the first quarter. Its equities unit climbed 39% to a record $2.1 billion. Together, those businesses produced Citigroup’s best quarterly performance since the financial crisis.

Chief Executive Officer Jane Fraser said in a statement that the company had entered the final stage of its divestitures and that 90% of its transformation initiatives had reached, or were close to reaching, target levels.

Citigroup, whose stock has been the best performer among major banks this year, has gained on its turnaround efforts and relatively low valuation. But as a global bank, Citi is also regarded as more exposed to geopolitical developments than other financial institutions.

Markets have swung this year on disruption tied to the latest artificial-intelligence models, risks from private credit and concerns over the Iran war that began in late February.

JPMorgan Chief Executive Officer Jamie Dimon said the U.S. economy showed resilience during the quarter, supported by consumer and business spending and debt repayment, but uncertainty is rising. “There are increasingly complex risk factors, including geopolitical tensions and wars, volatility in energy prices, trade uncertainty, massive global fiscal deficits and elevated asset prices,” Dimon said.

Kim Jung-a, contributing reporter, Hankyung.com, kja@hankyung.com