JP Morgan Chase profits beat forecasts

Wall Street banking giant JP Morgan Chase has reported a stronger-than-expected rise in second-quarter profits as legal and restructuring costs fell.

The largest US bank by assets reported a 5.2% rise in profits for the three months to end-June of $6.29bn (£4bn). Revenue fell 3.2% to $24.53bn.

Banks have been under pressure to cut costs and hold more capital in reserve in case of future financial shocks.

JP Morgan said legal costs fell sharply, from $669m last year to $291m.

"We've made good progress this quarter," said chief executive Jamie Dimon in a statement. "We are also on target to deliver on our expense commitments."

The fall in revenue was mainly due to a drop money made from mortgage banking and fixed-income trading.

FBR Capital Markets analyst Paul Miller said a lower-than-expected tax rate boosted the profit figures. "If you held their tax rate constant, the quarter is not as good as it looks," he said.

JP Morgan is one of the first of the big banks to report its latest quarterly figures. Analysts had expected the firm's profits to be weak, reflecting pressures on trading and worries about the global economy.

Wells Fargo also reported figures on Tuesday, with the largest mortgage lender in the US reporting a fall in second-quarter profits of $5.72bn, down slightly from $5.73bn.

Wells Fargo made $62bn of home loans in the three months to 30 June, up from $47bn a year earlier and $49bn in the first quarter.

"Mortgage banking was a little weaker than I had thought... that was a little bit of a disappointment," said Sandler O'Neill analyst R Scott Siefers.

JPMorgan shares were more than 1% higher at midday US time, while Wells Fargo was 0.85% up.