JP MORGAN beat expectations yesterday to post a 78 per cent jump in pre-tax profit, with investment banking revenues posting a dramatic recovery from a mediocre first-quarter last year.
Overall pre-tax profits soared to $8.06bn (£4.95bn), with investment banking fees revenue up 23 per cent to $1.79bn.
The investment bank recorded its second most profitable quarter ever, having had a particularly strong three months for M&A mandates.
JP Morgan was appointed to advise AT&T on its $39bn purchase of T-Mobile USA and Duke Energy’s $26bn acquisition of Progress Energy. The deals put it at the top of Dealogic’s first-quarter league table for global market share in M&A.
But the bank’s consumer business, with its hangover of struggling property exposure, is still a drag on profits. It announced that it will face a $650m pre-tax cost due to “foreclosure-related matters” due to an ongoing row over struggling mortgage-holders being wrongly evicted from their homes.
Overall, the retail bank saw pre-tax earnings drop five per cent on the same period last year, coming in at $1.49bn. Retail income was hit particularly by a $937m net loss in mortgage and auto lending, although this was an improvement on last year’s first-quarter loss of $1.19bn.
The bank’s real estate portfolio similarly remained in the red but saw a substantial improvement, going from $1.3bn to $162m in net losses.