FWD: JPMorgan reports better profit than forecasts

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Comment from sender:
It's always good news when a major bank can report profits than what it has forecated...

Because we are in a deep recession and high unemployment, getting a glimmer of hope in the banking world is great news...

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This article is from The Star Online (http://thestar.com.my)
URL: http://biz.thestar.com.my/news/story.asp?file=/2009/4/17/business/3713488&sec=business

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NEW YORK: JPMorgan Chase & Co reported better-than-expected first-quarter profit yesterday, as improved investment banking performance offset an increase in losses from credit cards and other consumer debt.

The results come as a deepening recession and rising unemployment forced the bank to set aside more money against losses in its consumer banking business.

Its shares fell slightly to US$32.30 from US$32.56 in pre-market trading on Thursday, after first-quarter profit to common shareholders fell 33% to US$1.52bil.

The bank set aside US$10bil against credit losses, almost twice the amount it put aside a year earlier.

While the bank has largely avoided the losses and writedowns on complex debt securities and subprime mortgages that hurt other banks in 2008, it is heavily exposed to consumer credit and chief executive Jamie Dimon has warned that rising unemployment will hurt the bank's consumer businesses in 2009.

"It is reasonable to expect additional increases to credit reserves if the economic environment worsens," said Dimon in a statement.

Offsetting rising credit card and mortgage losses, however, JPMorgan's investment bank reported profit of US$1.6bil, up from a loss of US$87mil a year earlier, on an increase in debt underwriting and strong credit, emerging markets and rates trading activity.

Analysts on average expected the second-largest US bank to earn 30 cents a share, with forecasts ranging from 11 cents to 45 cents a share, according to Reuters Estimates. —Reuters

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