JP MORGAN got the US bank second quarter reporting season off to a solid start yesterday, as a boost from falling impairment charges made up for a torrid period for its investment bank.
The bank booked net profit of $4.8bn (£3.1bn), 78 per cent higher than the $2.7bn it made in the second quarter last year. Earnings per share, a popular measure of banks’ performance in the US, were $1.09, significantly higher than the consensus analyst forecast of around 73 cents per share.
Chief executive Jamie Dimon said the bank had benefited from a $1.5bn reduction in loan loss reserves as the health of the economic environment improves, though this was negated to an extent by a $550m charge from the UK government’s tax on bonuses.
JP Morgan has eased back on and employee compensation so far this year after a regulatory crackdown on pay. It has put aside a pot of $5.85bn for the first six months of the year, compared to $6.01bn in the first half of 2009, despite global headcount rising 5.2 per cent to 26,279.
The biggest disappointment in JP Morgan’s performance came from its investment banking arm, which saw net income slip six per cent to $1.4bn on last year due to market shockwaves from the Eurozone sovereign debt crisis.