JP Morgan Chase benefited from an lift in retail banking (Reuters /Lucas Jackson)

JPMorgan Chase has recorded a drop in its net income to $5.4bn in its first quarter earnings.

The US banking group's results were declared "solid" by its CEO and significantly higher than analyst expectations.

The net income represented a 3 percent drop from the same period last year, a record at $5.56bn. The group's net revenue rose to $26.7bn, compared with $25.2bn the previous year.

Estimated consensus share earnings of $1.17 were improved upon by the group, which showed earnings of $1.31 a share. The higher revenues bode well for other Wall Street banks which have reports due.

Jamie Dimon, chairman and CEO, said in a company statement: "The firm reported strong revenue for the first quarter of 2012 on $27.4 billion, up 24 percent compared with the prior quarter and up 6 percent compared with the prior year.

"While several significant items affected our results, overall, the firm's performance in the first quarter was solid."

The group benefited from increases in mortgage lending, bolstered by low interest rates and incentive programmes seeing more homewoners looking to refinance.

Investment banking revenue dropped from $8,23bn in 2011's first quarter to $7.61bn, however that represented a 68 percent leap from the 2011's last quarter, which dropped to $4.35bn amid a peak in Eurozone concerns alongside a drop in confidence in the US economy.

Retail financial services saw a marked improvement, rising to $7.64bn, a 39.9 percent increase on the same quarter in 2011, and a 19.5 percent rise on the end of last year.

Overall expenses rose by $2.3bn from $16bn in 2011, despite the assistance of lower pay for investment bankers and renumeration taking up 35 percent of revenues.

"As we look toward the future we continue to build our businesses by investing in infrastructure, systems, technology, and new products, and by adding bankers and offices around the world. The strengths that are embedded in the company - our people, client relationships, product capabilities, technology, global presence and fortress balaqnce sheet - [provide us with a foundation that is rock solid and an ability to thrive regardless of what the future brings," Dimon added.

He warned that the group could still expect to feel more fallout from thse US housing market, forecasting "elevated levels of costs and losses associated with mortgage-related issues for a while longer".