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JPMorgan reports big first-quarter profit

April 13, 2011 |  7:31 am

JPMorgan Chase & Co. had an unexpectedly strong first quarter thanks to an improving American economy.

The bank’s profit over the last three months was $5.6 billion, up 67% from a year ago. The company 6a00d8341c630a53ef011279086e9928a4-800wi earned $1.28 a share, up 73% from a year ago, and higher than the $1.15 a share expected by analysts.

Revenue at JPMorgan, the first of the major banks to report its results, was actually down from a year ago but the firm had to put aside much less money to cover anticipated customer losses.  This underscores the improving credit trends among both businesses and consumers.

The company saw big profit from both its retail business –- led by Chase -- and its Wall Street investment bank, in contrast to recent quarters when one side of the firm has generally propped up the other.

“There is a lot of money washing around the world and obviously we are the beneficiary of that," Jamie Dimon, JPMorgan’s chief executive said during a call with analysts.

JPMorgan shares were up 0.1%, or 5 cents, to $46.71 in early trading.

The biggest hit to the bank’s balance sheet came from a payment the firm is planning to make to settle a large investigation by state and federal officials into how the nation’s largest banks have handled mortgages. Dimon said that the highly anticipated deal may be announced later Wednesday.

The economy’s strength has been particularly visible in the dramatic recent rise in mergers and acquisitions. JPMorgan has been in on most of the biggest deals -– including AT&T’s purchase of T-Mobile -– and its investment bank generated the largest profit of any division in the company.

The results also showed that companies have stepped up their borrowing, both from the bank and from the bond market, leading to big fees for JPMorgan.  

For ordinary consumers, the bank actually provided less in loans than it did a year ago. But the improving sentiment among consumers was visible in JPMorgan’s credit card business, which swung from a $303-million loss last year to a $1.343-billion profit this year.

Dimon has been one of the leading Wall Street critics of the recent push to regulate banks more tightly. He complained about some of those new regulations on the call, but so far they don’t appear to be hurting the bank’s bottom line.

--Nathaniel Popper

Photo: JPMorgan CEO Jamie Dimon. Credit: Mark Lennihan / Associated Press