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JPMorgan reports 50% drop in profit

US investment bank, JPMorgan Chase, reported a 50% drop in profit in the first quarter of 2008.

Results were in line with analysts’ expectations with profit falling to $2.37 million, compared with $4.79 million in the first quarter of 2007.

The bank said the decline was largely as a result of a $5.1 billion writedown on its mortgage book and investments in mortgage-backed securities.

Chief executive, Jamie Dimon, warned of bleak times in the year ahead, saying he expects capital markets to remain under stress and the US economy to remain weak.

Other banks will report first quarter results this week, including Merrill Lynch, which is expected to writedown between $4.5 billion and $6 billion.

In the case of Citigroup analysts are expecting an $11 billion hit from the credit crunch.

JPMorgan’s results come a few days after Wachovia reported a rise in mortgage foreclosures in California and Florida, which had contributed to a $4.4 billion writedown in the first quarter for the US banking chain.

JP Morgan, which is the third-largest bank in the US, recently acquired rival Bear Stearns, following the latter’s near collapse.

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