JPMorgan Chase & Co's
Shares of the second-largest U.S. bank jumped 3.1 percent in early trading on Wednesday as it said the pace of loan losses slowed. The results buoyed investors who had looked to JPMorgan -- the first of the major banks to report -- to end lagging worries over banks' health, and reassure Wall Street that the financial crisis was fading.
JPMorgan is a bellwether for many of the financials, said Matt McCormick, a portfolio manager and banking analyst at Bahl & Gaynor Investment Counsel in Cincinnati. Anyone who does not come in with similar results will suffer the consequences in the market.
The New York-based bank reported a quarterly profit of $3.3 billion, or 74 cents a share, compared with $2.1 billion, or 40 cents a share, a year earlier. Analysts on average expected the bank to report a profit of 64 cents a share, according to Thomson Reuters I/B/E/S.
Chief Executive Jamie Dimon, who has typically been cautious about the bank's outlook and warned at an investor day in February the economy could still be threatened by a double-dip scenario, was upbeat on a call with journalists.
The chance of a double dip is rapidly going away, he said. This could be the makings of a good recovery.
He said the bank was adding staff everywhere although he poured cold water on speculation it was close to raising its dividend, saying he wanted to see continued and sustained improvement in employment and loan delinquencies before boosting the payout.
LOWER LOSS EXPECTATIONS
The investment bank unit reported a quarterly net revenue of $8.3 billion, almost matching last year's record $8.4 billion first-quarter profit.
In the first quarter, the bank lost the top rankings in global debt and equity underwriting it enjoyed a year earlier. The unit slipped to third position for global debt underwriting and second for global equity underwriting in the first quarter.
JPMorgan's retail financial services unit, which includes the Chase consumer bank as well as mortgages and other consumer lending, reported a loss of $131 million.
The bank put aside $3.7 billion for future losses in this unit, down $144 million from the year-earlier quarter and down $496 million from the fourth quarter.
The bank trimmed its loss expectations for its credit-card portfolio and it cut the unit's provision for loan losses by $1 billion. The credit-card unit reported a first-quarter loss of $303 million, compared with a loss of $547 million a year ago.
They have set the bar very high for the rest of the industry, said Michael Holland, chairman of investment firm Holland & Co. This is a superb report.
Revenue rose 5 percent to $28.2 billion, beating analysts' expectations of $26.5 billion.
The bank raised its litigation reserves, including for mortgage-related matters, by $2.3 billion, which Dimon attributed to the mortgage area being confusing.
JPMorgan's shares climbed 3.1 percent, or $1.44, to $47.32 in early New York Stock Exchange trading. The shares have climbed 10 percent since the start of the year.
(Reporting by Elinor Comlay with additional reporting by Dan Wilchins and Steve Eder; Editing by Derek Caney and Maureen Bavdek)