NEW YORK — JPMorgan Chase reported a $3.3 billion first-quarter profit on big gains in the financial markets even as the Obama administration pressed for limits on banks’ trading of risky but lucrative investments.
The company’s earnings report Wednesday also had some good news on the economy: The bank is seeing the clearest signs yet of recovery. The dollar amount of its loans in or near default fell during the quarter from the final three months of 2009.
JPMorgan, the first of the big banks to report earnings for the January-March period, easily beat expectations as its earnings rose 57 percent from $2.1 billion a year earlier.
The company again added to its reserves for failed loans during the quarter, but its investment-banking division and other businesses enabled it to more than overcome the ongoing weakness in lending.
JPMorgan, the nation’s largest bank by assets, has been one of the strongest banks as it weathered the financial crisis and recession, so its performance shouldn’t be taken as a sign of how well other banks did during the quarter. Many financial companies don’t have such big investment-banking operations, which include trading of stocks and bonds.
Yet JPMorgan’s reliance on trading of risky assets is also problematic. The Obama administration and Congress are seeking to revive Depression-era limits on commercial banks’ trading activities as part of a broader reform of the financial system following the near-collapse of the banking system in 2008.
During a conference call with analysts, chief executive Jamie Dimon said his bank made “very little” from proprietary trading but declined to give specifics.
Regarding the proposed crackdown on derivatives, he estimated it could reduce trading revenue anywhere from “several hundred million to a couple billion dollars” depending on the details.
“It will be a negative,” Dimon said of the proposed legislation.
