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JP Morgan quarterly profits fall JP Morgan quarterly profits fall
(29 minutes later)
JP Morgan Chase has reported a 12.5% drop in first quarter net income of $2.1bn (£1.41bn) compared with $2.4bn the same time a year ago.JP Morgan Chase has reported a 12.5% drop in first quarter net income of $2.1bn (£1.41bn) compared with $2.4bn the same time a year ago.
The downturn and rising unemployment have forced it to set aside more money against losses in consumer banking.The downturn and rising unemployment have forced it to set aside more money against losses in consumer banking.
Meanwhile revenue increased 45% to $25bn from $16.9bn, mostly due to the bank's takeover of Washington Mutual.Meanwhile revenue increased 45% to $25bn from $16.9bn, mostly due to the bank's takeover of Washington Mutual.
JP Morgan shares rose 2.6%, or 67 cents, in New York trade to $33.23, after the better than expected results.JP Morgan shares rose 2.6%, or 67 cents, in New York trade to $33.23, after the better than expected results.
JP Morgan has largely avoided write-downs on subprime mortgages that have hit its peers in the past 18 months.JP Morgan has largely avoided write-downs on subprime mortgages that have hit its peers in the past 18 months.
"Importantly, we generated record firm-wide revenue; record revenue and net income in the investment bank; and benefited from underlying growth in retail banking," said chief executive Jamie Dimon."Importantly, we generated record firm-wide revenue; record revenue and net income in the investment bank; and benefited from underlying growth in retail banking," said chief executive Jamie Dimon.
JP Morgan bought most of the assets of failed lender Washington Mutual for $1.9bn last year. It also bought struggling Bear Stearns last May.JP Morgan bought most of the assets of failed lender Washington Mutual for $1.9bn last year. It also bought struggling Bear Stearns last May.
'Maintaining efforts''Maintaining efforts'
Net profit at its investment banking division came in at $1.6bn, compared with a loss of $87m in the first quarter of 2008.Net profit at its investment banking division came in at $1.6bn, compared with a loss of $87m in the first quarter of 2008.
Its retail financial services unit also recorded a profit of $474m, compared with a loss of $311m for the same period a year ago. The bank said this was largely as a result of the "positive impact" of the Washington Mutual acquisition.Its retail financial services unit also recorded a profit of $474m, compared with a loss of $311m for the same period a year ago. The bank said this was largely as a result of the "positive impact" of the Washington Mutual acquisition.
However, it reported a loss of $547m in card services, driven by a "higher provision for credit losses". The division made a $609m profit for the same quarter a year ago.However, it reported a loss of $547m in card services, driven by a "higher provision for credit losses". The division made a $609m profit for the same quarter a year ago.
"We are maintaining our efforts to help the economy recover. We continue to lend and have extended approximately $150bn in new credit to consumer and corporate customers during the first quarter," Mr Dimon added."We are maintaining our efforts to help the economy recover. We continue to lend and have extended approximately $150bn in new credit to consumer and corporate customers during the first quarter," Mr Dimon added.
'Confident'
Looking ahead to the rest of 2009, Mr Dimon said: "We are confident that even a highly adverse economic scenario would not compromise our overall strength and stability."Looking ahead to the rest of 2009, Mr Dimon said: "We are confident that even a highly adverse economic scenario would not compromise our overall strength and stability."
Shares in JP Morgan rose about 3% in pre-market trading immediately after the results, which were ahead of expectations, were announced. However, they later slipped back into negative territory.
Experts said the markets may be buoyed by the figures.
"In terms of the broad market impact, I think people are looking for health out of the financial sector," said Dan Haus, analyst at Miller Tabak & Co in New York.
"JPMorgan is one of the healthiest banks in the country, and how they perform will be used as a benchmark to determine a healthy bank from an unhealthy bank."
Payback availablePayback available
JP Morgan is one of several banks to have received money from the US Treasury Department under the Troubled Asset Relief Program.JP Morgan is one of several banks to have received money from the US Treasury Department under the Troubled Asset Relief Program.
It received $25bn in taxpayer funds from the US government in October last year, and Mr Dimon said the bank had the money to repay the money.It received $25bn in taxpayer funds from the US government in October last year, and Mr Dimon said the bank had the money to repay the money.
"We could pay it back tomorrow," said Mr Dimon, who added that the bank was waiting for guidance from the government on when it could do so."We could pay it back tomorrow," said Mr Dimon, who added that the bank was waiting for guidance from the government on when it could do so.
Earlier this week, Goldman Sachs raised $5bn in a stock sale to help pay back the $10bn it received from the government.Earlier this week, Goldman Sachs raised $5bn in a stock sale to help pay back the $10bn it received from the government.