Chillin' out till it needs to be funded
One wonders with all the press Goldman Sachs gets, whether any significant dent has been made in the Goldman Sachs preeminence in the capital markets but does not think much with Blankfein’s boys doing all required in time every time despite the baying jackals and the scandals following the blue eyed boys. Still, Jamie Dimon’s come a long way since his days at Citi when he set out n th parochial “Global Conquest” in the hot seat at J P Morgan There is very little to separate the going global genes of J P Morgan from the winning deal making Goldman Sachs even as winding down of write downs on their balance sheets coincides with the whittling down of an equally big trading fillip on Goldman Sachs’ Balance sheet as it reorganises segments ahead of Q4 reporting.
J P Morgan has set the bar high for its competitors with a eye popping $4.8 billion in profits outperforming belligerently high expectations that were by themselves 35% up year on year and outscored the hordes of analysts following the bank by 12% to get to an even stevens $1.12 per share in the last quarter tio end the decade as one of the two that never needed a penny in support. Though, their global expansion is limited as is their ever missing presence in retail, it was especially important to note that the JP Morgan team did not borrow a dime extra from the Fed as they also had one of the biggest mortgage books though securitised tranches were a big part.
Q4 outperformance in revenue by $2.7 odd billion saw the all year revenues at $104.8 billion and profits of $17.6 billion as Dimon looks forward to getting the Fed go ahead to pay larger dividends this year. The stock long subdued for the crises’ dogging the industry, will be a good investment for many more institutional investors this year Though there is no mention yet of its repurchase liabilities, the bill is unlikely to be even one third the $11 billion bandied about by a few media analysts
The 47% jump in net profit comes despite an enhanced $1.5 billion addition to the litigation reserve and custody assets were up 8% to $16 trillion maintaining its five fold leadership in the industry. Also mentioned in Dimon’s various ‘play the press’ evenings is a quest by J P Morgan to increase its capital by a further $30 billion boosted by such results and adding 18% tier I common to its equity if all of it went into enhancing the new Basel III defined Tier I well in time. Credit Card write downs were lower by $2 billion and the WaMu portfolio reserves funded by reduction in its non credit impaired reserves as markets returned to normal.