JP Morgan kicked off the third-quarter bank earnings season on Wednesday with a better-than-expected set of results.
Earnings per share came in at $1.01 versus a market consensus of $0.90, largely down to lower loan losses in its retail and credit card units.
The headlines, from Reuters:
RTRS-JPMORGAN CHASE REPORTS THIRD-QUARTER 2010 NET INCOME OF $4.4 BILLION, OR $1.01 PER SHARE, ON REVENUE1 OF $24.3 BILLION
RTRS-JPMORGAN CHASE AND CO Q3 SHR $1.01
RTRS- JPMORGAN CHASE AND CO Q3 SHR VIEW $0.90
RTRS-JPMORGAN CHASE AND CO SAYS ON TRACK TO HIRE OVER 10,000 PEOPLE IN THE U.S. IN 2010
RTRS-JPMORGAN CHASE & CO Q3 INVESTMENT BANK NET REVENUE WAS $5.4 BILLION
RTRS-JPMORGAN CHASE AND CO SAYS TIER 1 CAPITAL RATIOS WERE 11.9% AT SEPTEMBER 30, 2010
RTRS-JPMORGAN CHASE AND CO SAYS NONPERFORMING ASSETS TOTALED $17.7 BILLION AT SEPTEMBER 30, 2010
RTRS-JPMORGAN CHASE AND CO SAYS TIER 1 COMMON RATIOS WERE 9.5% AT SEPTEMBER 30, 2010
RTRS-JPMORGAN CHASE AND CO QTRLY PROVISION FOR CREDIT LOSSES $3,223 MLN
RTRS-JPMORGAN CHASE & CO Q3 RETAIL FINANCIAL SERVICES NET REVENUE WAS $7.6 BILLION
RTRS-JPMORGAN CHASE & CO Q3 CARD SERVICES NET REVENUE WAS $4.3 BILLION
RTRS-JPM SAYS TOTAL FIRMWIDE CREDIT RESERVES DECLINED TO $35.0 BLN, RESULTING IN A FIRMWIDE COVERAGE RATIO OF 5.1% OF TOTAL LOANS
RTRS-JPM’S DIMON SAYS EXPECT MORTGAGE CREDIT LOSSES TO REMAIN AT HIGH LEVELS FOR THE NEXT SEVERAL QUARTERS
RTRS-JPM’S DIMON SAYS IF ECONOMIC CONDITIONS WORSEN, MORTGAGE CREDIT LOSSES COULD TREND HIGHER
RTRS-JPMORGAN CHASE AND CO SAYS QTRLY MORTGAGE REPURCHASE RESERVES INCREASED $1.0 BILLION PRETAX
RTRS-JPM’S DIMON SAYS “WE EXPECT CREDIT CARD NET CHARGE-OFFS TO CONTINUE TO IMPROVE NEXT QUARTER”
RTRS-JPMORGAN CHASE AND CO Q3 TOTAL NET REV $23.82 BLN
RTRS-JPMORGAN CHASE AND CO Q3 SHR VIEW $0.90, REV VIEW $24.64 BLN — THOMSON REUTERS I/B/E/S
But while loan losses in retail and credit cards may have improved, CEO Jamie Dimon warned the bank’s mortgage and credit card portfolios were still bearing high net charge-offs overall and could trend higher if economic conditions worsened.
In the accompanying statement, he commented:
Our mortgage delinquency trends remained relatively flat compared with the prior quarter, and we expect mortgage credit losses to remain at these high levels for the next several quarters. If economic conditions worsen, mortgage credit losses could trend higher. With respect to our credit card portfolio, delinquencies and net charge-offs continued to improve, and we reduced loan loss reserves by $1.5 billion this quarter as estimated losses declined. We expect credit card net charge-offs to continue to improve next quarter.”
Revenues at the bank’s investment banking division, meanwhile, were down 33 per cent on the year — mostly due to lower underwriting and advisory fees, as well as lower revenues in fixed income markets.
Related links:
JP Morgan says earnings per share $1.09 in Q2 - FT Alphaville
JP Morgan Securities Inc. no longer exists – FT Alphaville