Credit Commentary

JP Morgan Chase Earnings Release

By Administrator on Tuesday, April 28 2009

JPMorgan Chase & Co. (NYSE: JPM) reported first-quarter 2009 net income of $2.1 billion, compared with net income of $2.4 billion in the first quarter of 2008. Earnings per share were $0.40, compared with $0.67 in the first quarter of 2008. That was lower than the year-ago period profit, but it easily beat analyst expectation of $0.32 a share, according to a survey conducted by Bloomberg.

In the US card services, the table below gives a quick look at comparison from previous quarters. End-of-period managed loans were $176.1 billion, an increase of $25.2 billion, or 17%, from the prior year and a decrease of $14.2 billion, or 7%. As reported this year, Net accounts of 2.2 million were opened.  Charge volume was $76.0 billion, a decrease of $9.4 billion, or 11%, from the prior year. Excluding Washington Mutual, charge volume was $71.4 billion, a decrease of $14.0 billion, or 16%, driven by a decline in sales volume of 9%.

The increase in credit provision reflected a higher level of charge-offs and an increase of $1.2 billion in the allowance for loan losses, due to a weakening credit environment. The managed net charge-off rate for the quarter was 7.72%, up from 4.37% in the prior year and 5.56% in the prior quarter. The 30-day managed delinquency rate was 6.16%, up from 3.66% in the prior year and 4.97% in the prior quarter. Excluding Washington Mutual, the managed net charge-off rate for the first quarter was 6.86% and the 30-day delinquency rate was 5.34%.

Jamie Dimon, Chairman and Chief Executive Officer, commented: 'Our fourth-quarter financial results were very disappointing, driven by a loss in Investment Banking. If the economic environment deteriorates further, which is a distinct possibility, it is reasonable to expect additional negative impact on our market-related businesses, continued higher loan losses and increases to our credit reserves”.

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