JP Morgan posts $2.1bn profit for Q1
by Gill Montia
Story link: JP Morgan posts $2.1bn profit for Q1
JP Morgan Chase has recorded a first-quarter net income of $2.1 billion (£1.41 billion).
The result is 12.5% down on a year ago, with the Wall Street bank explaining that it has added $4.2 billion to its credit reserves against future writedowns.
Revenue increased 45%, to $25 billion, largely as a result of the group’s acquisition of the failing Washington Mutual’s banking operations, in September of last year.
Net profit at JP Morgan’s investment banking division totalled $1.6 billion in the three months to the end of March, compared with a loss of $87 million in the first quarter of 2008.
The group’s retail financial services unit posted a profit of $474 million, compared with a loss of $311 million a year ago, again largely because of the Washington Mutual acquisition.
Commenting on the results, chief executive Jamie Dimon declared: “Importantly, we generated record firm-wide revenue; record revenue and net income in the investment bank; and benefited from underlying growth in retail banking.”
At the end of March, the bank’s Tier 1 capital ratio stood at 11.3%, or 9.2% excluding capital provided under the US Treasury’s Troubled Asset Relief Program (Tarp).
In related news, Goldman Sachs announced earlier this week that it would be raising $5 billion to pay back part of its Tarp loan.
The news was greeted enthusiastically by analysts and investors, suggesting that if Goldman Sachs is successful in reducing its Tarp debt, other US banks will be under pressure to follow suit.
