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US bank manages to avoid Q4 loss
By Madlen Read |
January 16, 2009, Friday
|
Print Edition
Print Edition
JPMORGAN Chase managed to avoid a loss in the fourth quarter, indicating that it is weathering the financial crisis better than some of the other big banks.
The company, however, added US$4.1 billion to loan loss reserves, proving that it is not immune to the deepening global recession.
The New York-based company yesterday reported a profit of US$702 million, or 7 cents per share, down 76 percent from US$2.97 billion, or 86 cents per share, a year ago.
Analysts, who had been trimming their estimates in recent weeks, expected break-even results.
CEO Jamie Dimon called the results "very disappointing." He said in a statement that results were hurt by markdowns on leveraged loans and mortgage trading positions, and overall weak trading results.
"If the economic environment deteriorates further, which is a distinct possibility, it is reasonable to expect additional negative impact on our market-related businesses, continued higher loan losses and increases to our credit reserves," Dimon said.
Viewed as one of the stronger United States banks for several quarters now, JPMorgan Chase & Co is in the midst of absorbing the two weaker banks it bought last year: Bear Stearns Cos and Washington Mutual Inc.
JPMorgan is the first of the big US banks to report results for the fourth quarter. The quarter was a particularly rough one for the financial services industry, leading the US government to loan hundreds of billions of dollars to US banks to get them to lend more.
JPMorgan Chase got US$25 billion, as did Bank of America Corp, Wells Fargo & Co, and Citigroup Inc. In December, Citigroup got an extra US$20 billion of funding.
JPMorgan said yesterday it extended more than US$100 billion in new credit to individuals, businesses, municipalities and non-profit organizations.
During the fourth quarter, JPMorgan's investment bank posted a loss of US$2.4 billion, down from a profit of US$124 million a year ago. Card services also reported a loss of US$371 million, down from a profit of US$609 million a year ago, as more cardholders failed to make their payments.
The retail financial services segment reported a 15 percent drop in profit to US$624 million. Income from asset management fell to US$255 million from US$527 million, while income from the corporate and private equity business rose to US$1.5 billion from US$270 million.
The commercial banking unit made a record profit of US$480 million, up from US$288 million a year ago.
The company, however, added US$4.1 billion to loan loss reserves, proving that it is not immune to the deepening global recession.
The New York-based company yesterday reported a profit of US$702 million, or 7 cents per share, down 76 percent from US$2.97 billion, or 86 cents per share, a year ago.
Analysts, who had been trimming their estimates in recent weeks, expected break-even results.
CEO Jamie Dimon called the results "very disappointing." He said in a statement that results were hurt by markdowns on leveraged loans and mortgage trading positions, and overall weak trading results.
"If the economic environment deteriorates further, which is a distinct possibility, it is reasonable to expect additional negative impact on our market-related businesses, continued higher loan losses and increases to our credit reserves," Dimon said.
Viewed as one of the stronger United States banks for several quarters now, JPMorgan Chase & Co is in the midst of absorbing the two weaker banks it bought last year: Bear Stearns Cos and Washington Mutual Inc.
JPMorgan is the first of the big US banks to report results for the fourth quarter. The quarter was a particularly rough one for the financial services industry, leading the US government to loan hundreds of billions of dollars to US banks to get them to lend more.
JPMorgan Chase got US$25 billion, as did Bank of America Corp, Wells Fargo & Co, and Citigroup Inc. In December, Citigroup got an extra US$20 billion of funding.
JPMorgan said yesterday it extended more than US$100 billion in new credit to individuals, businesses, municipalities and non-profit organizations.
During the fourth quarter, JPMorgan's investment bank posted a loss of US$2.4 billion, down from a profit of US$124 million a year ago. Card services also reported a loss of US$371 million, down from a profit of US$609 million a year ago, as more cardholders failed to make their payments.
The retail financial services segment reported a 15 percent drop in profit to US$624 million. Income from asset management fell to US$255 million from US$527 million, while income from the corporate and private equity business rose to US$1.5 billion from US$270 million.
The commercial banking unit made a record profit of US$480 million, up from US$288 million a year ago.
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