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By Niket Nishant and Nupur Anand
(Reuters) -JPMorgan Chase topped first-quarter profit estimates on record equities trading and higher fees from debt underwriting and advising on mergers, but the bank remained wary about a possible global recession this year.
CEO Jamie Dimon, who warned this week of negative consequences from trade wars, maintained his cautious tone as corporate America navigates President Donald Trump's tariffs.
"Clients have become more cautious amid an increase in market volatility driven by geopolitical and trade-related tensions," Dimon said. "The economy is facing considerable turbulence, including geopolitics."
The results from the biggest U.S. bank offer a glimpse into the implications of Trump's trade agenda. While his return to the White House boosted business optimism in the first quarter, policy uncertainty has upended those hopes.
The administration last week unveiled steep reciprocal tariffs on dozens of countries, only to pause many of them on Wednesday.
JPMorgan's shares rose over 3% after hitting a seven-month low earlier this week.
Dimon said the bank's economists estimate a 50% chance of a U.S. and global recession this year, down from 60% earlier this month.
"People are being cautious and pulling back on deals. The middle-market companies are being very cautious on investments," Dimon added.
The bank increased its provisions for credit losses in the first quarter to $3.3 billion from $1.9 billion a year earlier. Consumers and businesses could struggle to repay their loans if the import levies reignite inflation and dampen economic growth.
The buildup of reserves shows JPMorgan is taking a cautious approach to the economic uncertainty, which is a good signal, said Chris Marinac, director of research at Janney Montgomery Scott.
Earnings were $14.6 billion, or $5.07 a share, for the three months ended March 31. That compares with $13.4 billion, or $4.44 a share, a year earlier.
Excluding one-time costs, the bank earned $4.91 per share, higher than estimates of $4.61, according to data compiled by LSEG.
Heightened volatility in the first quarter due to shifting expectations lifted the bank's trading business as investors quickly adjusted their portfolios.
Trading revenue climbed 21% to $9.7 billion, higher than the earlier expectations of a low double-digit percentage gain. Equities trading surged 48% to a record $3.8 billion.
Investment banking fees climbed 12% to $2.2 billion, helped by higher debt underwriting and advisory fees.
Chief Financial Officer Jeremy Barnum said the bank was taking a cautious stance on investment banking.