(Bloomberg) -- JPMorgan Chase & Co., the biggest U.S. bank, said fourth-quarter profit rose 10 percent as expenses from litigation and employee compensation shrank and said a regulatory burden would have a smaller impact on capital requirements than previously estimated.
JPMorgan climbed 1.7 percent to $58.30 at 7:07 a.m. in New York. The shares had dropped 13 percent this year through Wednesday, the second-worst performance in the Dow Jones Industrial Average.
Net income rose to $5.43 billion, or $1.32 a share, from $4.93 billion, or $1.19, a year earlier, according to a statement Thursday from New York-based JPMorgan. Earnings were $1.40 a share excluding litigation costs and accounting adjustments, beating the $1.27 average estimate of 29 analysts surveyed by Bloomberg.
Wall Street firms are under pressure to cut costs as revenue from fixed-income trading slumps. JPMorgan Chief Financial Officer Marianne Lake said last month that the period had been quiet for bond and equity markets, adding that the Federal Reserve’s Dec. 16 interest-rate increase could provide a boost in 2016. The company had only $99 million in litigation costs after a $318 million benefit from a legal settlement. That compared with $990 million in the fourth quarter of 2014.
Revenue rose 1 percent to $22.9 billion in the fourth quarter. Non-interest expenses fell 7 percent to $14.3 billion. The number of employees declined to 234,598, a drop of 3 percent.
JPMorgan said its surcharge for global systemically important banks -- a closely watched measure that will determine its required capital ratio -- fell to 3.5 percent after the company cut client deposits and reduced derivatives. The bank said about a year ago that it could be as high as 5 percent.
Earnings at the corporate and investment bank surged 80 percent to $1.75 billion, driven by the lower legal expenses. Revenue slipped 4 percent from a year earlier to $7.1 billion on lower trading and investment-banking. Fixed-income trading revenue dropped 3 percent to $2.57 billion on lower commodities and credit activity. Equity-trading revenue declined 7 percent to $1.06 billion. Investment-banking revenue fell 11 percent to $1.47 billion on a drop in debt-issuance revenue.
Profit from consumer and community banking rose 10 percent to $2.41 billion. Revenue from mortgage fees and related income increased 2 percent to $11.2 billion, fueled by higher card and auto results.
Citigroup Inc., the third-biggest U.S. bank by assets, and Wells Fargo & Co., the top U.S. mortgage lender, are scheduled to report results Friday. Bank of America Corp., Morgan Stanley and Goldman Sachs Group Inc. will report next week.