JPMorgan reports 6% rise in 1Q profits as bank earnings season begins. Wells Fargo profit falls

NEW YORK (AP) — JPMorgan Chase reported a modest 6% rise in first quarter profits on Friday, as the major banks start reporting their quarter results for the first quarter.

Wells Fargo reported a decline in profit versus a year ago, although the result beat Wall Street’s expectations.

JPMorgan, the nation’s largest bank, earned a profit of $13.42 billion, or $4.44 a share, compared to a profit of $12.62 billion, or $4.10 a share, in the same period a year earlier. JPMorgan’s results were impacted by a $725 million one-time charge to the Federal Deposit Insurance Corporation.

While the results did beat analysts’ forecasts, the bank’s stock fell in premarket trading after JPMorgan gave a lower-than-expected forecast for its net interest income for the full year. That forecast largely reflects the bank’s expectation that the Federal Reserve will cut interest rates later this year.

Most metrics of JPMorgan’s business were solid for the quarter. While investment banking revenues were largely flat, the bank reported an uptick in activity. In the consumer bank, profits were up 6% while the bank set aside less money to cover potentially bad loans.

But following his letter to shareholders earlier this month, JPMorgan CEO Jamie Dimon warned that the bank remains concerned about inflation remaining higher than what investors are currently expecting as well as the risk wars and geopolitical tensions pose to the global economy.

“Many economic indicators continue to be favorable. However, looking ahead, we remain alert to a number of significant uncertain forces,” Dimon said, citing the wars in Gaza and Ukraine, high amounts of government spending across the world and ongoing other geopolitical pressures.

Wells Fargo issued its first earnings report since the Biden administration eased some of the restrictions on the bank after a series of scandals.

Wells earned $4.6 billion in the first quarter, or $1.20 per share, beating analyst estimates of $1.06 per share. However, the profit was less than the $5 billion, or $1.23 per share, that Wells earned in the same period a year ago.

The San Francisco-based bank said average loans fell from last year’s first quarter but that drop-off was expected because of elevated interest rates.

Wells shares inched back into positive territory in premarket trading, rising 1% after initially falling nearly 2% after it released the earnings report.

In February, the Office of the Comptroller of the Currency, one of the regulators of big national banks like Wells Fargo, terminated a consent order that had been in place since September 2016. The order — which came after Wells’ employees were found to have opened millions of accounts illegally in order to meet unrealistic sales goals — required the bank to overhaul how it sold financial products to customers and provide additional consumer protections, as well as employee protections for whistleblowers.

Citigroup will report its first-quarter results later Friday morning.