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| Version 1 | Version 2 |
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| JP Morgan's $1.3bn sub-prime hit | JP Morgan's $1.3bn sub-prime hit |
| (about 5 hours later) | |
| US bank JP Morgan Chase has said its earnings for the last three months of 2007 fell 34% as a result of its exposure to soured US mortgage loans. | US bank JP Morgan Chase has said its earnings for the last three months of 2007 fell 34% as a result of its exposure to soured US mortgage loans. |
| Net income was $2.97bn (£1.5bn) in the quarter to the end of December, down from $4.53bn a year earlier, it said. | Net income was $2.97bn (£1.5bn) in the quarter to the end of December, down from $4.53bn a year earlier, it said. |
| Other US and European banks have also had to cut the value of investments linked to the US housing market. | Other US and European banks have also had to cut the value of investments linked to the US housing market. |
| Also on Wednesday, Wells Fargo said the home loans crisis had led to its first drop in quarterly profits since 2001. | Also on Wednesday, Wells Fargo said the home loans crisis had led to its first drop in quarterly profits since 2001. |
| Wells Fargo, the biggest bank on North America's West Coast, reported a 38% decline in net income to $1.36bn for its last three months of 2007. | Wells Fargo, the biggest bank on North America's West Coast, reported a 38% decline in net income to $1.36bn for its last three months of 2007. |
| However, the losses at JP Morgan and Wells Fargo were smaller than those of many of their peers. | However, the losses at JP Morgan and Wells Fargo were smaller than those of many of their peers. |
| On Tuesday, Citigroup reported a $9.83bn net loss for the last three months of 2007 after having to cut the value of its investments by $18.1bn. | On Tuesday, Citigroup reported a $9.83bn net loss for the last three months of 2007 after having to cut the value of its investments by $18.1bn. |
| Shares in JP Morgan rose 1.7% to $24.51, one of the few winners on Wall Street, while Citigroup fell 2.6% to trade at $26.24. Citigroup has lost more than half its market value since the beginning of 2007. | |
| MAIN SUB-PRIME LOSSES SO FAR Citigroup: $18bn UBS: $13.5bn Morgan Stanley $9.4bn Merrill Lynch: $8bn HSBC: $3.4bnBear Stearns: $3.2bn Deutsche Bank: $3.2bn Bank of America: $3bnBarclays: $2.6bn Royal Bank of Scotland: $2.6bn Freddie Mac: $2bnJP Morgan Chase: $1.3bn Credit Suisse: $1bn Wachovia: $1.1bn IKB: $2.6bn Paribas: $439mSource: Company reports Timeline: How the sub-prime crisis unfolded | MAIN SUB-PRIME LOSSES SO FAR Citigroup: $18bn UBS: $13.5bn Morgan Stanley $9.4bn Merrill Lynch: $8bn HSBC: $3.4bnBear Stearns: $3.2bn Deutsche Bank: $3.2bn Bank of America: $3bnBarclays: $2.6bn Royal Bank of Scotland: $2.6bn Freddie Mac: $2bnJP Morgan Chase: $1.3bn Credit Suisse: $1bn Wachovia: $1.1bn IKB: $2.6bn Paribas: $439mSource: Company reports Timeline: How the sub-prime crisis unfolded |
| Further problems | Further problems |
| JP Morgan chief executive Jamie Dimon said the bank had set aside $2.54bn in anticipation of further losses stemming from defaults on home loans and credit card repayments. | JP Morgan chief executive Jamie Dimon said the bank had set aside $2.54bn in anticipation of further losses stemming from defaults on home loans and credit card repayments. |
| This was more than the $1.79bn it set aside in its previous quarter, and comes as consumers are having to deal with falling house prices, and higher energy and petrol costs. | This was more than the $1.79bn it set aside in its previous quarter, and comes as consumers are having to deal with falling house prices, and higher energy and petrol costs. |
| JP Morgan's investment bank division was worst affected, with its profits slumping 88% to $124m. The company's credit card services arm was also hit, with profit down 15%. | JP Morgan's investment bank division was worst affected, with its profits slumping 88% to $124m. The company's credit card services arm was also hit, with profit down 15%. |
| Many of the problems facing banks today stem from a long period of low interest rates, which saw consumers borrow heavily and often beyond their means. | Many of the problems facing banks today stem from a long period of low interest rates, which saw consumers borrow heavily and often beyond their means. |
| That was fine while interest rates stayed low, but as borrowing costs started to rise many consumers found it difficult to keep up with their loan and mortgage payments. | That was fine while interest rates stayed low, but as borrowing costs started to rise many consumers found it difficult to keep up with their loan and mortgage payments. |
| Default levels jumped to records, slashing the value of investments that had been linked to the mortgages and credit card debts, and plunging the global banking system into a credit crunch and lending crisis. | Default levels jumped to records, slashing the value of investments that had been linked to the mortgages and credit card debts, and plunging the global banking system into a credit crunch and lending crisis. |