Analysts had expected net income of $1.59bn or 5 cents a share, according to Bloomberg estimates.
And yes, like Goldman Sachs record-breaking second quarter, JP Morgan also had record revenue — $27.7bn to be exact.
Here’s the press release:
NEW YORK–(BUSINESS WIRE)–JPMorgan Chase & Co. (NYSE: JPM) today reported second-quarter 2009 net income of $2.7 billion, an increase of 36% compared with net income of $2.0 billion in the second quarter of 2008. Earnings per share were $0.28, compared with $0.53 in the second quarter of 2008. Current-quarter earnings per share reflected a one-time, non-cash reduction in net income applicable to common stockholders of $1.1 billion, or $0.27 per share, resulting from repayment of TARP preferred capital.
Jamie Dimon, Chairman and Chief Executive Officer, commented on the results: “We are pleased that, despite a continued difficult economic environment, we were able to report $2.7 billion in earnings and record revenue of almost $28 billion. Of particular note, the Investment Bank reported record overall revenue for the first half of the year, which included record fees and Fixed Income Markets revenue for this quarter. In addition, Commercial Banking, Asset Management, Treasury & Securities Services and Retail Banking each delivered another quarter of solid performance. These results were negatively affected by the continued high levels of credit costs in Consumer Lending and Card Services, which we expect will remain elevated for the foreseeable future.”
Regarding balance sheet strength, Dimon added: “Even after further strengthening our credit reserves by $2 billion to $30 billion and repaying the $25 billion of TARP capital, the firm ended the quarter with a very strong Tier 1 Capital ratio of 9.7% and a Tier 1 Common ratio of 7.7%. With these additions to reserves, we now have an extremely high loan loss coverage ratio of 5%.”
Dimon further remarked: “Throughout this crisis, we have remained committed to doing our part to help bring stability to the communities in which we operate and to the financial system overall. During the quarter, we maintained our efforts to support economic recovery and to help keep people in their homes. We continued to lend, extending approximately $150 billion in new credit to consumer and corporate customers. We approved 138,000 trial mortgage modifications, bringing total foreclosures prevented since 2007 to 565,000 – a number we expect to continue to grow.”
Commenting on the second half of 2009, Dimon concluded: “While we do not know if the economy will deteriorate further, we feel confident that, with our strong capital and reserve levels and significant earnings power, we can continue to reinvest in our businesses and do well for our clients, communities and shareholders over the long term.”
It’s really still a tale of two banks here, however: JPM’s investment bank vs its credit card and consumer lending ops, where it reported a net loss of $672m and $955m respectively. In contrast, on the IB side you had a stellar year — driven largely by the same stuff as Goldman — Fixed income and underwriting:
Net revenue was $7.3 billion, an increase of $1.8 billion from the prior year. Investment banking fees were up 29% to a record $2.2 billion and comprised the following: advisory fees, up 6% to $393 million; equity underwriting fees, up by $561 million to a record $1.1 billion; and debt underwriting fees, down 10% to $743 million. Fixed Income Markets revenue was a record $4.9 billion, up by $2.6 billion from the prior year, driven by strong results across all products, as well as the absence of markdowns related to leveraged lending funded and unfunded commitments and mortgage-related exposure. The current period had modest gains on those exposures, compared with losses totaling $1.1 billion in the prior year. Fixed Income Markets revenue was offset partially by losses of $773 million from the tightening of the firm’s credit spread on certain structured liabilities. Equity Markets revenue was $708 million, down by $371 million, or 34%, reflecting weak trading results and losses of $326 million from the tightening of the firm’s credit spread on certain structured liabilities, offset by strong client revenue, particularly in prime services. Credit Portfolio revenue was a loss of $575 million, down by $914 million, reflecting mark-to-market losses on hedges of retained loans, partially offset by the net impact of credit spreads on derivative assets and liabilities and net interest income on loans.
Related links:
Goldman reports Q2 EPS of $4.93 – FT Alphaville