JPMorgan and Wells Fargo showed the two sides of the banking coin on Friday.
Size is not a guarantee of success, but it helps.
JPMorgan — largest US bank by assets — posted far weaker-than-expected quarterly profit as uncertainty on the US economy weighed down investor trading revenue and consumer borrowing.
Most of the bank’s big businesses, including commercial lending and credit cards, delivered lower profits.
But CEO Jamie Dimon is not responding by dialing up its risk-taking in commercial lending or commodities. JPMorgan is selling its commodities arm to Mercuria Energy Group for $3.5 billion expected to close this quarter.
Bond trading revenue was off as well as investors pared holdings.
“It’s not like selling cereal — it’s not like your volumes go up 2 percent every day,” Dimon said on the earnings conference call.
The business will grow over the next decade or two, he added.
JPMorgan shares shed 3.7 percent on Friday, closing at $55.30.
Wells Fargo, on the other hand, the biggest US mortgage lender, reported a higher-than-expected 14 percent rise in first-quarter net profit, as a series of cost cuts and one-time gains helped the bank offset its lowest volume of home lending in five-and-a-half years.
Wells Fargo, the most profitable bank in the US in 2013, has been hurt in recent quarters by declining demand for mortgage refinancing, as lending rates have risen.
But a series of one-time items this quarter helped offset much of the decline in the mortgage business. Wells Fargo recorded $847 million in gains on its equity investments, about 7.5 times the $113 million it earned a year earlier.
Wells Fargo shares rose 0.8 percent to close at $48.08.