JPMorgan profit falls 19%
new york — JPMorgan Chase & Co, the biggest US bank, said firstquarter profit fell 19 per cent on lower revenue from fixed-income trading and mortgages, themes that may be repeated across Wall Street next week. The shares declined 2.9 per cent.
Net income dropped to $5.27 billion, or $1.28 a share, from $6.53 billion, or $1.59, a year earlier, according to a statement on Friday from New York-based JPMorgan. Ten analysts surveyed by Bloomberg estimated $1.46 a share on average.
JPMorgan, the first of the top US banks to post results for the period, said profit fell in every major division, amid a 42 per cent drop in mortgage revenue and a 21 per cent slide in fixedincome trading. Chief executive officer Jamie Dimon, 58, warned investors in February that trading had fallen 15 per cent for the first two months of 2014, a decline analysts including David Konrad of Macquarie Group Ltd. blamed on a reduction in the Federal Reserve’s bond purchases.
“It’s been a tough quarter for the industry,” said Pri de Silva, senior banking analyst at CreditSights Inc. in New York.
JPMorgan fell to $55.75 in New York trading at 7.41am from $57.40 on Friday.
Konrad said in an April 4 re- search note that banks will have a “challenging quarter” as higher interest rates reduce loan refinancings.
Total revenue dropped 7.7 per cent to $23.9 billion, as noninterest expenses declined 5.1 per cent to $14.6 billion.
JPMorgan’s investment-banking head, Daniel Pinto, said this week he was overhauling the division’s reporting lines after his former co-head, Mike Cavanagh, left to join Carlyle Group. Pinto named Carlos Hernandez cohead of global banking with Jeff Urwin, John Horner head of investor services and Joyce Chang global head of research.
Earnings at Pinto’s corporate and investment bank dropped 24 per cent to $1.98 billion, as revenue declined 15 per cent from a year earlier to $8.61 billion. Fixed-income trading revenue fell to $3.8 billion on “weaker performance across most products and lower levels of client activity,” the bank said. The 21 per cent drop in fixed-income trading revenue surpassed estimates of a 15 per cent decline from Moshe Orenbuch, an analyst at Credit Suisse Group, and 17 per cent from Wells Fargo & Co’s Matt Burnell.
Net income from consumer and community banking, run by Gordon Smith, fell 25 per cent to $1.94 billion as provisions for credit losses surged 49 per cent to $816 million. Revenue was $10.5 billion, down 10 per cent from a year earlier. —