JPMorgan Chase’s (NYSE:JPM) Corporate and Investment Bank (or CIB) segment managed net revenue of $10.5 billion in 1Q18, more than its revenues of $9.6 billion in the previous year and $7.5 billion in the last quarter.
The growth was aided by higher equity trading and market and investor services. The growth also included $500 million market to market gains on select investments as well as a $150 million reduction in taxes following the enactment of the Tax Cuts and Jobs Act.
The segment saw a decline of 3% in banking revenue to $3.0 billion mainly due to a 7% fall in equity and debt underwriting fees and lower lending revenue and partially offset by higher advisory fees and treasury services revenues on rates. The segment’s investment banking revenue fell 7% to $1.6 billion in the quarter. JPMorgan Chase continues to garner a higher share of fees, followed by Goldman Sachs (GS), Bank of America (BAC), and Citigroup (C).
Banks (XLF) have seen some rebound in their trading revenues in 1Q18 due to volatility in policy changes and trade wars. CIB’s market and investor service revenue rose 15% in 1Q18 to $7.5 billion mainly due to a 25% rise in equity trading and a flat performance of fixed income trading. Equity trading rose on derivatives and prime services.
CIB’s expenses rose 9% to $5.7 billion on higher compensation and transaction costs. It also witnessed a credit release in the oil and gas sector, resulting in a credit benefit of $158 million in 1Q18 compared to $96 million in the previous year.
CIB posted net income of $4.0 billion in 1Q18 compared to $2.3 billion in 4Q17 and $3.2 billion in 1Q17.
JPMorgan Chase & Co. operates as a financial services company worldwide. It operates through four segments: Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking, and Asset & Wealth Management. The Consumer & Community Banking segment offers deposit and investment products and services to consumers; lending, deposit, and cash management and payment solutions to small businesses; residential mortgages and home equity loans; and credit cards, payment processing services, auto loans and leases.