In 2013, JPMorgan added staff in investment banking and won market share in most major businesses, including advising companies on mergers and underwriting stock offerings.
But overall revenue in Wall Street businesses is falling or barely growing. Merger volume, for example, fell 6 percent last year to the lowest level since 2009, Thomson Reuters data shows. Bond underwriting activity fell 2 percent to its lowest since 2011.
JPMorgan posted net income of $5.28 billion, or $1.30 per share, for the quarter, compared with $5.69 billion, or $1.39 a share, a year earlier.
Excluding special items, the company earned $1.40 per share, beating the analysts' average estimate of $1.35, according to Thomson Reuters I/B/E/S. The company's shares, which have been trading this month at their highest levels since 2000, edged 0.7 percent higher to $58.09 on Tuesday morning.
The special items included a benefit of 21 cents per share from the sale of Visa shares and 8 cents from the sale of One Chase Manhattan Plaza and an expense of 27 cents from legal bills, including the Madoff settlements.
Three months ago, JPMorgan reported its first quarterly loss under Dimon after recording after-tax expenses of $7.2 billion to settle government and private investigations.
The allegations involved, among other things, shoddy dealing in mortgage instruments before the financial crisis, derivatives trading in London and pricing in electric power markets, as well as failing to report suspicions of wrongdoing by Madoff.
Investors have been looking for reassurance from the company that the worst of its legal expenses are behind it.
Noninterest expenses fell 3 percent to $15.55 billion during the quarter, while provisions for bad loans fell 84 percent to $104 million.
JPMorgan said its assets shrank to $2.42 trillion at the end of December from $2.46 trillion three months before. It had $2.36 trillion a year earlier.
Equity underwriting revenue soared 65 percent to $436 million. But investment banking fees were pulled down by lower debt underwriting, where revenue declined 19 percent, and advisory fees, which fell 7 percent. Altogether, investment banking fees declined 3 percent.
The bank's market share in equity underwriting rose to 8.3 percent in 2013, moving it to second place in the industry from fourth. Goldman Sachs led with 11.4 percent, according to Thomson Reuters data.
Higher interest rates on home mortgage loans weighed on JPMorgan, like the rest of the banking industry.
JPMorgan posted a $274 million pre-tax loss from its mortgage loans, compared with a year-earlier profit of $789 million because the company was unable to reduce expenses as quickly as lending volumes declined.
The bank said it expected to lose money making mortgages again this quarter.
Reflecting a slowdown in loan refinancing, total U.S. home mortgage borrowing was down 50 percent at the end of December from a year earlier and down by a quarter from the end of September, according to the Mortgage Bankers Association.