Declining credit defaults and late payments help bolster J.P. Morgan Chase profit
J.P. Morgan Chase announced today an astounding gain in profit, with profit this past quarter rising 67%, this gain beat analysts’ expectations of the U.S.’s second largest bank (by assets).
Most of the gains were attributed to provisions for credit losses dropping. Losses dropping by a whopping 83 percent as late payments and defaults have declining.
Though the company has posted significant gains over the previous year, J.P. Morgan Chase still posted a $208 million loss. Gains realized were offset by the ongoing and exceptionally high losses related to mortgages and mortgage default issues.
The retail bank said in a statement today that first quarter net income increased from $3.33 billion to $5.56 billion – or 74 cents per share to $1.28 per share – in the same periods for 2010 and 2011. Additionally, income had increased from $4.83 billion in the fourth quarter 2010.
According to Bloomberg.com, their analysts reported that “the results beat the average per-share estimate for adjusted earnings of $1.15 by 26 analysts surveyed by Bloomberg.”
Despite increased profit, there is a long road ahead for the banking and mortgage industry. Based on reported total net revenue, the bank still saw a 9 percent drop in revenue to $25.22 billion from prior year’s $27.67 billion.
The New-York based bank was the first in its industry to post first quarter numbers, helping send Wall Street higher during opening trading.