JP Morgan has reported a 23% rise in profit in the third quarter, as the bank was able to set aside less money to cover loan losses.
The company reported a net profit of $4.4bn (£2.8bn), compared with a profit of $3.6bn a year ago.
The bank set aside $1.55bn for retail credit losses during the quarter, less than half the $3.99bn it set aside during the third quarter of 2009.
But income at its investment bank fell 33% because of a drop in revenue.
JP Morgan's shares rose 1.5% in pre-market trading.
Total revenue at the bank fell 11% year-on-year to $23.8bn, slightly below forecasts.
"We are pleased to report a continued overall decline in credit costs, although our mortgage and credit card portfolios continued to bear very high net charge-offs," commented JP Morgan chief executive Jamie Dimon.
He said he expected mortgage credit losses to remain at high levels for "the next several quarters" as customers struggled to repay debt, but also said defaults on credit cards were likely to fall in the next quarter.
JP Morgan is the first major US bank to report third-quarter earnings.
Analysts and investors questioned whether other banks would be able to match its results when they report next week.
"I think [JP Morgan has] set the bar extremely high," said Michael Holland, from Holland & Co in New York.
"What they've said is that in this tough environment they are the 'A-Team' and it is going to make it very tough for the rest of them to live up to it."
JP Morgan's card services unit posted a profit of $735m, compared with a loss of $700m a year ago, while income at its retail unit rose from $7m to $907m.
But despite setting aside less money for loan losses, profits at its mortgage banking and other consumer lending business fell 50% to $207m.
And, in what could be a bad sign for rivals Goldman Sachs and Morgan Stanley, investment banking profits fell by a third to $1.2bn.