JPMorgan Chase & Co, the biggest US bank by assets, reported a 6.7 percent drop in quarterly profit as costs to cover possible sour loans to troubled shale oil companies rose and revenue from trading and investment banking declined.


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However, both earnings per share and revenue beat analysts` lowered expectations.


The bank`s net income fell to $5.52 billion in the first quarter ended March 31, from $5.91 billion a year earlier. On a per-share basis, earnings fell to $1.35 from $1.45.


Analysts had expected earnings of $1.26 per share, according to Thomson Reuters.


Total revenue fell 3 percent to $24.08 billion, beating the average estimate of $23.40 billion, while revenue from fixed-income trading - often JPMorgan`s most volatile business - fell 13.4 percent to $3.60 billion.


JPMorgan is the first US bank to report results since the Federal Reserve`s decision in December to raise interest rates by 0.25 percentage points, the first hike in nearly a decade.


Bank of America Corp and Wells Fargo & Co, the second and third-biggest US banks, report on Thursday.


A slide in commodity and oil prices, a slowdown in China, near-zero interest rates, mounting regulatory costs and hefty capital requirements have set up the banking industry for its worst start to a new year since the 2007-2008 financial crisis.


And while stock market activity picked up in March, that was not enough to make up for weak trading volumes during a volatile January and February.


JPMorgan`s shares were up 2.5 percent at $60.75 in premarket trading.


Investment banking revenue fell 24.5 percent to $1.23 billion, even though JPMorgan topped the global league table with $1.22 billion in fees during the quarter, according to Reuters data.


Industry-wide, investment banking fees fell 29 percent in the period, the slowest first-quarter since 2009. Financial stocks were the worst performers in the S&P 500 index in the first three months of 2016, falling 5.6 percent compared with the overall index`s rise of 0.8 percent. JPMorgan`s stock fell 10.3 percent in the period - but the shares of its five big US rivals fell by even more. The bank said its total non-interest expenses fell 7 percent to $13.84 billion, helped by lower legal costs.


Like other US banks, JPMorgan has resorted to aggressive cost controls to underpin earnings over the past several quarters as revenue growth remains sluggish.