New York - JPMorgan Chase’s profit had climbed 12 percent, beating analysts’ estimates, as first-quarter revenue from trading stocks and bonds increased for the first time since 2010, the biggest US bank said.

Net income rose to $5.91 billion (R71.4bn), or $1.45 a share, from $5.27bn, or $1.28, a year earlier, according to a statement yesterday from New York-based JPMorgan.

Thirty-one analysts surveyed estimated per-share earnings of $1.41.

Excluding 13c in legal expenses and about 3c in accounting adjustments, earnings were $1.61 a share.

Trading revenue had a “very strong” start to the year as higher volatility boosted volume, Daniel Pinto, the chief executive of JPMorgan’s investment bank, said in February. Wall Street firms contended with falling trading revenue last year amid unusually calm markets.

“We expected an improvement in fixed income trading revenues,” Pri de Silva, a senior banking analyst at CreditSights, said before results were released. “That should bode well” for competitors including Goldman Sachs Group, Morgan Stanley and Citigroup, De Silva added.

JPMorgan climbed 0.6 percent to $62.07 in early trade in New York. Revenue in the quarter increased 4.1 percent to $24.8bn, mostly driven by gains at the corporate and investment bank.

Macro events

Profit in Pinto’s division climbed 19 percent to $2.54bn, the biggest increase in the company’s four main businesses. The company said “macro events” drove robust client activity in currencies, emerging markets, rates and equities.

Fixed income trading revenue rose 4.5 percent to $4.07bn, exceeding the $3.94bn average estimate of analysts surveyed. Equity trading revenue advanced 22 percent to $1.61bn, beating the $1.41bn estimate.

Investment banking fees also rose, fuelling a 12 percent increase in the division’s revenue to $3.1bn.

Higher capital requirements prompted JPMorgan, the biggest investment bank, to lower its target for returns at that business to 13 percent from 15 percent, according to a February presentation.

The firm was also considering whether to shrink in areas including interest rates trading and prime brokerage because of the new capital rules, Pinto said.

Net income from consumer and community banking, run by Gordon Smith, increased 12 percent to $2.22bn as revenue advanced 2 percent and expenses declined 4 percent.

JPMorgan said profit in asset management, run by Mary Erdoes, rose 11 percent to $502 million.

Assets under management climbed $111bn to $1.8 trillion amid greater inflows and rising equity markets.

Commercial banking, the unit run by Doug Petno, posted a 1 percent profit increase to $598m. The division’s provision for credit losses was $61m, up $56m from a year earlier as the bank set aside more reserves related to loans to energy companies.

JPMorgan shares traded at a discount to the estimated valuations of its four main businesses, leading analysts including Richard Ramsden of Goldman Sachs to examine whether the firm would be worth more split into pieces.

The bank’s valuation was hurt by uncertainty around future legal costs, chief executive Jamie Dimon said last week in his annual letter to investors. The firm, which has posted more than $36bn in legal costs since the financial crisis, might see those expenses ”normalise” by 2016, he said.

“Though we still face legal uncertainty, particularly around foreign exchange trading, we are determined to reduce it,” Dimon said in the letter.

Bloomberg