JPMorgan follows profit trail
(21 July 2009 – USA) US investment bank, JPMorgan Chase, has followed in the footsteps of its competitor, Goldman Sachs, and released a solid second quarter profit result that beat out expectations, despite continued losses in some business units.
JPMorgan released record net revenue results for the quarter, but losses on loans continued to eat into profits. The bank recorded firm-wide revenue of US$27.7 billion, an increase of 41 percent.
Second quarter profit rose by 36 percent from the same time last year and by 27 percent from the first quarter of 2009, to US$2.7 billion (A$3.4 billion).
The record result was led be the Investment Bank, which reported record overall revenue for the first half of the year.
Even in investment banking, however, net income of US$1.5 billion fell 8 percent from the second quarter, though it more than tripled from a year earlier, partly due to the acquisition of Bear Stearns.
The overall results were negatively affected by the continued high levels of credit costs in Consumer Lending and Card Services, which are expected to remain elevated for the foreseeable future.
The credit card business lost US$672 million in the second quarter, compared to a US$250m gain a year earlier, and chief executive, James Dimon said that it is unlikely the bank will make money in that business in 2010.
Retail banking earnings of US$15m were far below levels from a year earlier and the previous quarter.
The credit card loss ratio for JPMorgan’s relatively conservative portfolio rose to almost 9 percent and is expected to be around 10 per cent this quarter, while losses in the portfolio acquired with Washington Mutual could reportedly reach 24 percent.
Second quarter profit rose by 36 percent from the same time last year and by 27 percent from the first quarter of 2009, to US$2.7 billion (A$3.4 billion).
The record result was led be the Investment Bank, which reported record overall revenue for the first half of the year.
Even in investment banking, however, net income of US$1.5 billion fell 8 percent from the second quarter, though it more than tripled from a year earlier, partly due to the acquisition of Bear Stearns.
The overall results were negatively affected by the continued high levels of credit costs in Consumer Lending and Card Services, which are expected to remain elevated for the foreseeable future.
The credit card business lost US$672 million in the second quarter, compared to a US$250m gain a year earlier, and chief executive, James Dimon said that it is unlikely the bank will make money in that business in 2010.
Retail banking earnings of US$15m were far below levels from a year earlier and the previous quarter.
The credit card loss ratio for JPMorgan’s relatively conservative portfolio rose to almost 9 percent and is expected to be around 10 per cent this quarter, while losses in the portfolio acquired with Washington Mutual could reportedly reach 24 percent.
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