JPMorgan’s profit jumps
JPMorgan Chase kicked off the third quarter earnings season on a high note yesterday, announcing quarterly profit up 22 per cent thanks to lower loan losses.
New York-based JPMorgan, the first of the banks to report third-quarter earnings, has like its peers struggled to make new loans this year, even as losses on bad mortgages and credit cards have eased.
JPMorgan said third-quarter net income rose to $4.4bn (£2.8bn), or $1.01 a share, from $3.6bn, or 82 cents a share a year earlier. Analysts expected a profit of 90 cents a share.
JPMorgan’s card services arm reported a profit of $735m against a year-earlier loss of $700m and its retail unit reported a profit of $907m, compared to just $7m a year earlier.
Profit in its mortgage banking and other consumer lending business slipped to $207m, down 50 per cent on the previous year, even as the bank set aside less money against loan losses in the unit.
Chief executive Jamie Dimon expects mortgage losses to remain high for the next several quarters. “If economic conditions worsen, mortgage credit losses could trend higher,” he said.
Like its peers, JPMorgan is facing changes to its business after the US financial reform measures passed by President Obama in the summer.
Worries that regulatory changes will trim some of the bank’s most profitable business have weighed on JPMorgan shares. The bank is working with regulators and devoting substantial resources to implementing reforms, Dimon said.
As a result of financial reform, the bank said last month it is moving about 45 traders that previously traded for its own account into a new unit within its asset management business.