JP Morgan makes a record profit of $6.5 billion in the first quarter of the year, owing to the strengthening U.S. economy. The bank also notes of the strong performance across its segments. The rest of this story can be read below.
Online PR News – 25-April-2013 – London – JP Morgan announced that it made profits totalling to $6.5 billion during the first quarter of 2013, compared to $4.9 billion in the same period last year.
The bank also disclosed a strong performance of all its business segments. Specifically, its retail banking deposits increased to 10 per cent, with new mortgage orders rising to 37 per cent and investment banking remaining in the top spot.
Owing to the improved state of Americans’ personal finances, the bank shelled out $1.2 billion less for loss reserves, namely $650 million for mortgage loans and $500 million for property assets.
JP Morgan’s spending on litigation also dropped to $0.3 billion in the first three months of 2013 from $2.7 billion in the same period last year.
The results came as the bank’s chief executive officer Jamie Dimon received a chastening for $6 billion in losses sustained by the firm from credit derivatives trading, known as the “London Whales” last year.
Notably, the bank’s corporate and private equity segment, where the London Whale trades came from, posted a $250-million profit compared to a $1-billion loss last year.
Mr. Dimon, who also serves as the bank’s chairman, says the results were due to the strengthening of the U.S. economy. “We are seeing positive signs that the economy is healthy and getting stronger. Housing prices continued to improve and new home purchases are also starting to come back,” he elaborates.
The JP Morgan CEO adds, “We also saw strong performance in our credit card portfolio, with net charge-offs remaining near historic lows, another sign that consumers are healthier and more confident.”
Mr. Dimon, however, notes that the demand for loans had decreased in the relevant quarter as small businesses remained wary about the economy’s recovery and possible changes to tax rates. It, he says, made them reluctant to invest.
Nevertheless, Mr. Dimon maintains that his company’s main priority is to strengthen its controls and carry out compliance mission.
JP Morgan’s fellow mortgage lender, Wells Fargo, also posted record profits in the same period. The U.S.’s fourth biggest bank says its net income rose to 22 per cent to $5.2 billion.
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