JPMorgan Chase will kick off the earnings season this Friday as the first company in the Dow Jones Industrial Average to report, with investors braced for a fourth straight drop in first-quarter trading.
According to analyst estimates, the US bank is expected to report a 10 per cent decrease in earnings per share to $1.43, as well as a 4.5 per cent decline in revenues to $24.6 billion.
Tensions between Russia and Ukraine have put a strain on the short-term revenue generating capital on banks, capital markets and related firms. As a consequence, JPMorgan has disclosed that trading revenue for the first quarter of its 2014 financial year seems weak compared to last year, with markets revenues down 15 per cent.
JPMorgan also disclosed the continuing problems with its mortgage production unit, due to the rising interest rate environment, which has led to lower demand for mortgage services. The bank posted a 40 per cent decline in its mortgage fees and related income last year in comparison to FY 2012.
JPMorgan Chase hit the headlines last week, after a US judge ruled shareholders can sue the bank for securities fraud over the activities of the "London whale" trader. The bank lost $6.2 billion as a result of the scandal linked to trades made by Bruno Iksil from the London-based chief investment office.
