JP Morgan Chase reports record profits

Last Updated on Tuesday, 30 November 1999 00:00 Wednesday, 13 April 2011 19:20

By: fanatic

The second biggest bank in the U.S., JP Morgan Chase & Co., has beaten analyst expections for 1st quarter results. The bank said profit rose 67 per cent, a second record in a row as it reduced provisions for bad debts in mortgages and credit cards. Net income rose to $5.6 billion compared with $3.3 billion in the first quarter of 2010.

Revenues were $25.8 billion, down from $28.2 billion in 2010. Average estimates from analysts centered on revenue of $25.5 billion.

JP Morgan results are closely watched as they are the first major bank to report earnings for the season and provide an overview of how other banks might have fared.

Profits from the investment banking arm of JP Morgan fell 4.1 per cent to $2.4 billion and net revenues at the division declined by 1 per cent. Retail financial services reported a loss of $208 million (2010: -$131 million) on net revenues of $6.3 billion (-19%).

$2 billion was freed up as the bank reduced provisions for credit card losses. Having lost money throughout 2009, the bank's credit card division produced a profit of $1.34 billion for the quarter. Delinquency rates have dropped from 5.6 per cent in Q1, 2010 to 4.1 per cent in Q4 2010 to 3.57 per cent in Q1 2011. But mortgage losses continued to mount and a provision of $1.1 billion was made in the accounts. Chief Executive Officer Jamie Dimon,said "Unfortunately, these [mortgage] losses will continue for a while.”