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Bank results season: JP Morgan rubbishes the constraints

In a quarter where Jamie Dimon led JP Morgan into China with a Broker Dealer licence ( rather no broker dealer privileges, just underwriting and third party businesses but inside the new $4 Trillion market) JP Morgan reported $25billion in revenues in line with expectations. However, like we said, they did manage to make magic with that $25 billion itself, and reported profits of more than a $1 per share to bring home net profits of $4.8 billion higher by $1.5 billion from the previous quarter with the highest gains in the final dwindling of loan loss reserves

JP Morgan also managed to stem credit losses for a Loan coverage ratio of 5.3% with $36b in credit reserves and $108bn in Tier I Common Capital Net profits have nearly doubled year on year from $2.7 billion and that after paying GBP 400 billion in Super tax to British regulators/government. The same quarter has also seen reaffirmation of their global plan with Corporate business in India already activated. JP Morgan will not be entering retail business in India directly, partnering with existing providers. The call also continues to focus on the retail business and Basel 3 requirements but J P Morgan has pulled more of its profits from Corporate Banking and the global expansion is also likely led by the same.

“More bankers, More products, more services for clients” in response to a question on Investment Banking plans..we are not cutting down staff anywhere in Investment Banking ( Advisory, IPO Services, underwriting, Structured Finance, Fixed Income)

Similarily, The Retail Financial Services and Card Services is a $7.8 billion and $4.2 billion up less than a 1% from Q1 and down 0.5% (Cards ) respectively ( from Q1 2010) while mortgages down 22% year on year grew 2% from the previous quarter. Things on the net profit front improved from $1.5 billion lower loss reserves. J P Morgan needs to fructify efforts in India, China and other new georaphies faster to regain its status as a growing, thriving corporation and quickly. However pre tax income in cards becamee positive after a 6 quarter run of negative 2% returns earning a pre tax income of 1.54% of the loan and 9% of the Equity of the business.

Commercial Banking and Treasury and Securities Services grew lower in the Quarter while the Asset Mangement business also grew only $23 million for a total of less than $5 billion to the topline and Private Equity business was down to an income of $653 million, 20% lower than the year earlier. Also JP Morgan is rolling out a buy back program for its shares ( to return cash to shareholders..)

1/3 of the repurchase program was over in Q1 and 2/3 is on right now ( lead in from GIC analyst on call)

Bank results week

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This entry was posted on July 15, 2010 by in Banking, Financial Markets, Global, India, US.

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