(Adds details, shares)

July 14 (Reuters) – JPMorgan Chase & Co, the biggest
U.S. bank by assets, reported a better-than-expected quarterly
profit on Friday as gains from higher interest rates and loan
growth more than offset a drop in bond trading.

Trading revenue fell for the first time in five quarters as
volatility hit multi-year lows, but the drop was not as bad as
expected by a company executive in the run-up to the results.

Executives at big banks warned in recent weeks that trading
revenue for the quarter would be down from a year earlier, when
client trading surged around UK’s Brexit vote.

The quarter benefited from the Federal Reserve raising
interest rates for the second time this year in June. The target
range for overnight interest rate now stands at 1 percent to
1.25 percent, compared with 0.25 percent to 0.50 percent a year
earlier.

“We continued to post very solid results against a stable-to
improving global economic backdrop. The U.S. consumer remains
healthy,” Chief Executive Jamie Dimon, 61, said in a statement.

The bank’s net income rose 13.4 percent to $7.03 billion in
the second quarter ended June 30. [http://bit.ly/2tQ630n
]

Excluding a gain from a legal settlement, the company earned
$1.71 per share, compared with analysts’ average estimate of
$1.58 per share, according to Thomson Reuters I/B/E/S.

Markets revenue fell 14 percent, led by a 19 percent
decrease in fixed income markets revenue to $3.22 billion.

Mortgage lending continued to be a dark spot in the bank’s
results as higher interest rates kept borrowers from
refinancing. Mortgage fees and loan servicing revenue fell about
41 percent to $404 million.

Net interest income rose 7.6 percent to $12.21 billion,
primarily driven by loan growth and the higher rates.

Rising interest rates are usually good for banks, allowing
them to increase how much they charge for loans faster than they
increase how much they pay for deposits.

JPMorgan’s non-interest expenses rose to $14.51 billion, up
from $13.64 billion a year earlier.

At the end of May, Chief Financial Officer Marianne Lake had
estimated expenses of less than $14.5 billion in the quarter.

JPMorgan’s shares were little changed in premarket trading.
They have risen 7.9 percent in value this year, mirroring gains
in the broader S&P 500 Financial Index.

About half of those gains have come after June 28 when the
Federal Reserve approved JPMorgan’s plan to spend as much as
$19.4 billion to buy back stock over the next year. The bank
also won permission to increase its quarterly dividend.

Wells Fargo & Co and Citigroup Inc are also
scheduled to report results on Friday.
(Reporting by Sweta Singh in Bengaluru and David Henry in New
York; Editing by Saumyadeb Chakrabarty)

Read the original article on Reuters. Copyright 2017. Follow Reuters on Twitter.