The Banking and Strategy Initiative

Chillin' out till it needs to be funded

Bank Results Season: Jamie Dimon leaves as Chairman of the combined Bank

 

English: Mortgage Loan Fraud Assessment based ...

English: Mortgage Loan Fraud Assessment based upon Suspicious Activity Report Analysis (Photo credit: Wikipedia)

Of course that was a technical correction as he left Chairmanship of Chase and this would be typical froosh media that you finally got rid of by coming here ( as I did). And most of the speculation linking that to today’s results will die quicker than Dimon can take a chair to defend because after the early Analyst meet to assuage the bigger concerns, Dimon might also do a Fuld and ride it out incognito till he finishes off that settlement with Eric Holder over documentary fraud in the mortgages business.

The Bank was due to make payment of just $920 Bln on the first settlement but has probably done more as it announced a clean wipe out of Q2 profits which in the same quarter last year mostly survived the whale trade as the Bank ran good profits in Q2 and Q3 then.

English: Deputy Attorney General Eric Holder o...

English: Deputy Attorney General Eric Holder opened an Interagency Working Group meeting of the White House Initiative on Asian Americans and Pacific Islanders hosted by the Department of Justice on October 18, 2000, which addressed LEPissues. In the immediate background, White House representative Irene Bueno, Assistant Attorney General for Civil Rights Bill Lann Lee, and Community Relations Service Director Rose Ochi look on. (DOJ photo) (Photo credit: Wikipedia)

As Reuters did report in the run up to the settlement, Holder has asked the bank for $4 Bln in cash damages in addition to $7 Bln in foreclosure penalties paid back to customers or otherwise made part of the mortgage cost structure

The $9,150 Bln in provisions led to a $7.2 Bln after tax impact or a $1.85 that wiped out profits for the third quarter as the bank chose to play safe with reserves which would have otherwise been stable on year and well above Analyst estimates at $1.42 per share. Mortgage rates for first time buyers would soon go down from near 5% levels as news of a Taper is withdrawn probably in the coming months ( as the current modicum of market expectations )

The bank has expensed this from current provisions of $28B for legal settlements while for the coming quarter the bank will be still internally expecting further losses of $5.7 Bln significantly lower after this expense from $6.8 Bln

Operationally revenues were down $2 Bln and Tangible Book Value hit 45 cents as it remained well above $39

Credit Card volumes (Chase), deposits and investment assets at the “Wealth” unit also grew in double digits as Consumer and Small Business led with $11 Bln in Revenues. Merchant processing for Cards, affected y the Durbin amendment was back in growth with $186 Bln. Almost $4 Bln in the unit accrued from non interest charges from retail and card accounts

Auto Loans (originations ) were $6 Bln as last quarter and year and mortgages (Q3-Commlbankingoriginations) were $20 Bln a double digit dip over last quarter and last year. The bank also made margins on purchased Mortgages of the same amount

Deposit margins stabilised to 2.32% same as linked quarter and have stayed up since being 2.56% last year, still imacting the big banks’ reducing margins in lending

As the bank earlier noted, overall mortgage volume (applications) was down 40% in the September quarter.

q3cribb

Cards and Auto business  including the $58 jump from new Merchant Servicing volumes returning to $186 mln Net Charge offs were down substantially again to below 3% levels and 30+, 1.68%

q3-CIB

CIB says the $2.2 Bln was in fact a 12% improvement over last year but things continue to look insipid and weak as the bank looks at ways to return to warehousing and underwriting munis and High yield debt offers a market development exercise it did almost by itself in the USA. The bank is rid of commodities units also after its warehouses were challenged by Coors and others for delays of more than a year for Aluminium orders

Investment Banking expansion has returned in 2013 on IPO resurgence and the bank also landed $1.5 Bln in Fee income as Net Income (Profits) for the division climbed 17% even as underwriting barely made $1 Bln. Fixed Income and Euities split trading $3.4 Bln and $1.2 Bln and ROE turned out a lot like a high school fashion show or utilities mandated returns at 16% as Consumer Banking dug in its heels after a continued showcasing of good profits though Dimon left charge of the business in last week’s move

Of course as the Froosh media would have put it out at the blogs to run up the “holitical debate” on the internet the results season headline would have read- TAKING A VEGAS HOLIDAY, MR DIMON? while Dimon asks JP Morgan to be seen in the act as ” a port in the storm” 

 

 

 

 

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