JP Morgan Chase profits rise in wake of currency manipulation case

JP Morgan Chase, the biggest US bank by assets, said second-quarter profit climbed 5.2 per cent as expenses fell.

Net income advanced to $6.29 billion, or $1.54 a share, from $5.98 billion, or $1.46, a year earlier, according to a statement on Tuesday.

Wall Street firms have turned to cost-cutting measures after trading revenue declined in four of the past five years.

JPMorgan, the first US bank to report second-quarter results, said in May it would eliminate thousands of jobs and send back-office workers to cheaper locations to save money.

"We're starting to see the efficiency gains come through," Jeff Harte, an analyst at Sandler O'Neill and Partners, said in a phone interview before results were released.

“Big banks have scale that we really haven’t seen the advantage of because of litigation and regulatory expense.”

Noninterest expenses fell 6 per cent $14.5 billion, while revenue declined 3.2 per cent to $24.5 billion. JPMorgan agreed in May to plead guilty to a felony charge for conspiring to manipulate currencies, paying almost $900 million in fines to US authorities.

The bank, which had already set aside reserves for the costs, said the blame was “principally attributable” to a trader who had left the company.

The world’s largest foreign-exchange dealers had been accused of colluding to influence benchmark rates.

The bank said this month it was replacing its top lawyer, Steve Cutler, after almost nine years. Stacey Friedman, currently general counsel of the corporate and investment bank, will take over early next year for Cutler, who presided over more than $36 billion in costs to resolve disputes stemming from the financial crisis.

JPMorgan’s board said in May it will weigh changes to executive pay after record low support for the firm’s most recent compensation packages.