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JP Morgan Chase posts $5.6B profit

Oct 14, 2014, 8:04 AM EDT
JPMorgan Chase.
AFP/Getty Images

U.S. banking giant JP Morgan Chase has reported a $5.6bn (£3.5bn) profit for the three months to 30 September. The BBC reports:

The quarterly results represent a marked improvement on a year earlier, when the bank made a $380m loss. This was the result of setting aside billions of dollars to settle government charges relating to the sale of mortgage-related investment products in the run-up to the financial crisis.

JP Morgan is the first major US bank to report its third quarter results. Other big US banks will post their results later this week. The JP Morgan results were due to be published at 08:30 local time (13:30 BST), but were posted early.

They showed total revenue for the quarter of $25.2bn, up 5% on a year earlier. Revenue at the investment banking business fell by $600m, with profits down by 34%. Revenue at the asset management arm grew by $250m to $3bn, with profits up 20%.

"Our businesses continue to perform well," said chief executive Jamie Dimon.

The bank was hit last year by an after-tax expense of $7.2 billion to settle government allegations of wrongdoing related to mortgage instruments before the financial crisis. The latest results included a legal expense of $1 billion after tax. Reuters reports:

However, the bank said it expected total adjusted expenses for 2014 to be above the $58 billion, excluding legal costs, that it had forecast. Costs totaled $59 billion in 2013. Revenue from fixed-income, currency and commodity trading rose 2.1 percent to $3.51 billion in the latest quarter compared with a year earlier, and was also slightly higher than in the preceding quarter.

Market activity picked up in September, largely due to the European Central Bank's efforts to stimulate growth and a batch of data suggesting the U.S. economy was strengthening. The surprise exit of superstar Bill Gross from bond trading giant Pimco also spurred bond market activity in late-September.

"Growth is modest. The headline numbers have come out slightly below expectations, but the model of stability is there, and that's ultimately what you want from a bank," said Simon Maughan, head of research at financial analysis firm OTAS Technologies in London.

The bank did not provide a figure for costs related to an attack on it computers that was discovered in August and exposed the names and contact information of some 76 million households and seven million small businesses.

JPMorgan suffered another technical embarrassment on Tuesday when its results appeared on website shareholder.com hours ahead of their scheduled release time. Bank spokesman Joe Evangelisti acknowledged that there had been a problem at shareholder.com, a Nasdaq OMX-owned website that hosts investor relations information for the bank, but did not explain how the early release happened.

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