Traders at JP Morgan Chase raked in record revenues at the start of the year as they cashed in on financial market volatility from the Iran war.
The US banking giant said trading revenues jumped 20 per cent to $11.6billion (£8.5billion) in the first quarter – its biggest ever haul – as turmoil triggered by conflict in the Middle East boosted business.
Citigroup also reported its highest quarterly revenue in a decade of $24.6billion (£18.1billion) as market volatility sent trading revenues up 19 per cent.
First quarter profits at the bank leapt 42 per cent to $5.8billion (£4.3billion) in the latest sign of how Wall Street banks are benefiting from the carnage.
The figures came a day after arch-rival Goldman Sachs posted its best quarter for five years following a bumper performance by its equity traders.
Wall Street trading desks have been on a hot streak since Donald Trump returned to the White House last year as his erratic policies rattle markets.
This has boosted trading volumes as investors seek to navigate the turmoil – with the banks that handle the trades such as JP Morgan and Goldman cashing in along the way.
JP Morgan chief executive Jamie Dimon suggested there was no end in sight to the turbulence.
‘The US economy remained resilient in the quarter, with consumers still earning and spending and businesses still healthy,’ said Dimon.
‘At the same time, there is an increasingly complex set of risks — such as geopolitical tensions and wars, energy price volatility, trade uncertainty, large global fiscal deficits and elevated asset prices.
‘While we cannot predict how these risks and uncertainties will ultimately play out, they are significant and they reinforce why we prepare the Firm for a wide range of environments.’
Unlike Goldman, JP Morgan saw revenues rise in both equity trading, which was up 17.5 per cent to $4.5billion (£3.3billion), and fixed income, where there was a 21 per cent jump to $7.1billion (£5.2billion).
While Goldman’s equity traders posted record figures, its bond traders missed out, with revenues at the fixed income, commodities and currencies business down 10 per cent.
The stellar performance at its trading arm sent JP Morgan profits up 13 per cent to (£16.5billion) £12.2billion in the first three months of the year – its second best quarter on record.
Axel Rudolph, an analyst at IG, said: ‘JPMorgan’s results underline the continued strength of the US banking sector, with solid gains in both consumer and investment banking helping to drive another rise in profits.
‘The resilience of the US consumer remains the cornerstone here, with spending and earnings holding up well despite a more uncertain backdrop.
‘However, Jamie Dimon’s caution is hard to ignore. The economy may be holding firm for now, but the growing list of geopolitical and macro risks means the outlook is far from straightforward.
‘Markets have been willing to look through these concerns in recent months, but if energy prices remain high, that resilience will be tested. For now, JPMorgan continues to set the pace, but the environment is becoming more challenging.’
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