JPMorgan Chase and Co today said its profits rose by 76 per cent in the second quarter, exceeding analysts expectations.
The bank said a reduction in provisions for soured mortgages and credit-card loans buoyed the results.
Second-quarter net income climbed to $4.8 billion, or $1.09 a share, from $2.72 billion, or 28 cents, in the same period a year earlier and from $3.33 billion in the first quarter, the New York-based company said today in a statement.
The per-share earnings compared with an average estimate for adjusted earnings of 71 cents projected by 22 analysts surveyed by Bloomberg. "It's great to see credit finally confirmed, that the trend is improving," Gary Townsend, president of Hill-Townsend Capital LLC in Chevy Chase, Maryland, a hedge fund that specializes in financial firms, said in a Bloomberg Television interview.
Chief executive officer Jamie Dimon, 54, who has kept the bank profitable by relying on investment-banking revenue, said the results were "still unacceptable" because consumer lending charge-offs and late payments remain high.
The company cut provisions for bad loans in the retail-banking business by $2 billion in the second quarter as investment-banking profit dropped 44 percent from the first quarter.
JPMorgan rose to $40.54 in New York trading from $40.15 at the close on the New York Stock Exchange yesterday. The shares are down 3.2 per cent this year through yesterday.
Second-quarter revenue fell 7.6 per cent to $25.6 billion. Fixed-income revenue was $3.6 billion, compared with $4.9 billion a year earlier and $5.46 billion in the first quarter.
While home-lending and credit-card losses continued to weigh on earnings, the company set aside fewer provisions for future losses in both divisions.
Retail banking earned $1.04 billion, compared with a $131 million net loss during the first quarter and a $15 million gain a year earlier. The division benefited from a reduction in provisions to $1.7 billion from $3.73 billion the prior year, JPMorgan said.
Credit-card services earned $343 million, compared with a net loss of $303 million in the prior three months and a $672 million loss a year earlier.
Bloomberg