The CEO of JPMorgan’s corporate and investment bank sent a note out to employees on Thursday to highlight the firm’s earnings report.
JPMorgan Thursday morning posted earnings of $US1.76 per share, above the $US1.65 consensus, with the corporate and investment banking unit topping forecasts.
“Last year’s record third quarter somewhat overshadows year-over- year comparisons, but this quarter was quite
good in its own right, with solid underlying performances across the businesses,” Daniel Pinto, CEO of JPMorgan’s corporate and investment bank, wrote in a memo seen by Business Insider.
Trading, however, was a weak spot. Trading revenue for the third quarter was down 21% from the same period last year at $US4.5 billion, with fixed income revenues down 27%. Pinto pointed to muted markets to explain the weaker quarter for the business.
“Low volatility and the lack of market-moving events produced revenue more in line with an average third quarter,” Pinto wrote. “Despite the quieter markets, strong M&A and corporate finance activity drove revenue in corporate derivatives and we continued to gain market share and revenue in both prime and cash equities, with particular strength internationally.”
JPMorgan’s trading business isn’t the only one under pressure, of course. At Citigroup, fixed-income trading took a 16% hit year-over-year, dropping to $US2.9 billion from $US3.4 billion. The blame for the decline in trading has largely been ascribed to record-low market volatility. 2017 just hasn’t had the surprising whipsaw market moments that 2016 did, such as Brexit and the election of President Donald Trump.
Still, JPMorgan’s Q3 results were quite good outside of trading.
“While attention is often placed on comparative trading revenue, the overall CIB produced a very healthy quarter,” Pinto said.
“Global investment banking fees of $US1.8 billion nearly tied a third quarter record set last year. Advisory revenue was the highest in ten years and revenue in debt underwriting was the second highest in a decade.”