(Adds details from filing and context)
NEW YORK, May 2 (Reuters) - JPMorgan Chase & Co expects second-quarter revenue from bond and equity trading to decline by about 20 percent from a year earlier, the biggest U.S. bank by assets said on Friday.
The outlook is based on results so far this quarter which "reflect a continued challenging environment and lower client activity," JPMorgan said in a quarterly filing with the U.S. Securities and Exchange Commission.
Almost all the major Wall Street investment banks reported first-quarter declines in trading revenue from a year earlier.
Revenue from bond trading has persistently declined over the past five years, raising concerns that the business has permanently shrunk and is not just suffering a cyclical downturn from the financial crisis.
Equity trading has been weak as well, but is not as big a factor in the firms' overall revenue.
JPMorgan, with assets of $2.48 trillion, updated its 2014 outlook for the company and its businesses in the filing made after the stock market closed on Friday.
It affirmed its previous 2014 estimate that adjusted expenses will be below $59 billion, but said the final tab will depend on performance-related compensation.
The company reduced its estimate of possible legal costs for which it has not built reserves to $4.5 billion at the end of March, from $5 billion three months before, the filing showed.
JPMorgan CEO Jamie Dimon last year agreed to pay some $20 billion to settle lawsuits and investigations in its effort to reduce legal liabilities.
In after-market trading, JPMorgan shares slipped 1.2 percent from Friday's close of $55.58.
(Reporting by David Henry and Lauren Tara LaCapra in New York; Editing by Meredith Mazzilli and Richard Chang)