JPMorgan Chase & Co.'s first-quarter profit easily beat expectations Wednesday as the Wall Street giant reported it earned $3.3 billion US, up from $2.1 billion, or 57 per cent, from a year earlier.

Investment banking, especially bond trading, generated the bulk of its profits. The bank said that division earned $2.5 billion, up 50 per cent from a year earlier. That helped offset consumer loan losses.

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Jamie Dimon, CEO of JPMorgan Chase & Co., listens during a January 2009 news conference in San Francisco. Dimon said Wednesday the U.S. economy is showing clear signs of improvement. ((Paul Sakuma/Associated Press))

Its non-performing loans, those that are in default or close to being in default, totalled $2.7 billion, up $946 million from a year earlier but a $763 million improvement from the final three months of 2009.

The bank said it lost $1.3 billion on its real estate portfolios, slightly more than the $1.1 billion it lost the previous year.

Signalling that it expects further credit weakness, the bank set aside $3.3 billion for real estate loan losses, up from $3.1 billion a year earlier.

The bank's losses in its credit card business fell to $303 million, while provision for future credit card losses also dropped to $3.5 billion.

The firm earned 74 cents per share, easily topping analysts' expectations of 64 cents. Total revenue rose five per cent to $28.2 billion for the quarter, surpassing forecasts.

CEO Jamie Dimon said the American economy was showing clear signs of improvement.

Expects strong recovery

"We believe these improvements will continue and are hopeful they will gather momentum, resulting in a strong recovery," Dimon said.

It is the first of the big banks to report earnings for the January-March period. Bank of America Corp. is scheduled to report earnings on Friday, followed by Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley the following week. 

JPMorgan was less exposed to the troubled subprime mortgages and commercial real estate that led to the financial crisis and emerged even bigger, after it snapped up troubled rival Bear Stearns and retail banking company Washington Mutual.

With files from The Associated Press