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Deepening recession batters JPMorgan

JPMORGAN Chase & Co said yesterday that first-quarter profit fell, as the deepening recession and rising unemployment forced it to set aside more money against losses in its consumer banking business.

Net income fell to US$2.14 billion, or 40 cents a share, from US$2.37 billion, or 68 cents a share a year earlier, for the three months ended March 31. Revenue increased 45 percent to US$25 billion from US$16.9 billion.

While the bank has largely avoided the losses and write°?downs on complex debt securities and subprime mortgages that hurt other banks in 2008, it is heavily exposed to consumer credit and Chief Executive Jamie Dimon has warned that rising unemployment will hurt the bank's consumer businesses in 2009.

JPMorgan shares have outperformed the sector since the start of the year, up about 3 percent at US$32.56 compared to a 20-percent decline in the KBW Bank Index.


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