Wednesday, April 13, 2011

JPMorgan (JPM) Led by Investment Banking

JPMorgan Chase & Co. (NYSE:JPM) turned in a solid performance in the first quarter, which where bolsters by strong results in the investment banking unit.

Net income jumped 67 percent to $5.6 billion, driven by a significantly lower provision for credit losses, partially offset by lower net revenue.

The company reported earnings per share of $1.28, which was $0.12 over the consensus of $1.16. Revenue for the quarter fell 8 percent to $25.8 billion against the consensus projections of $25.48 billion.

Jamie Dimon, Chairman and Chief Executive Officer, said, "The Firm’s results reflected a strong quarter across the Investment Bank and solid performance from Card Services, Commercial Banking, Treasury & Securities Services, and Asset Management. These results partially benefited from improved credit trends in our credit card and wholesale businesses."

For the quarter JPMorgan generated $8.23 billion in revenue in its investment banking unit, slightly down from the $8.32 billion generated last year, but up from the $6.21 billion in the fourth quarter.

Net income from investment bank dropped from $2.47 billion in the same quarter last year to $2.37 billion in the first quarter.

Net revenue for retail financial services was $6.3 billion, down by $1.5 billion from last year. Net interest income fell $394 million to $4.6 billion, the result of lower loan balances because of narrower loan spreads and portfolio runoff. Revenue not related to interest dropped 40 percent to $1.6 billion, as mortgage fees and related income were lower.

A lower provision for credit losses, partially offset by lower net revenue, resulted in card services net income jumping from a loss of $303 million last year in the same quarter to $1.3 billion this year.

A reduction in the provision for credit losses and higher net revenue gave a boost to the commercial banking unit, which generated a net income of $546 million, an increase of $156 million over the first quarter of 2010. Revenue rose to $1.5 billion, a gain of $100 million over last year.

Net income for Treasury and Securities services rose $37 million to $316 million, with net revenue up $84 million to $1.8 billion.

Asset management net income increased $74 million to $466 million. These results reflected higher net revenue and a lower provision for credit losses, mostly offset by higher noninterest expense. Net revenue was up $275 million, ending at $2.4 billion for the quarter.

Net income for corporate and private equity soared from $228 million last year to $722 million in 2011.

JPMorgan was trading at $47.30, gaining $0.66, or 1.42 percent, as of 9:39 AM EDT.

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