J.P. Morgan Chase & Co. is expected to report that its first quarter profit fell by more than 50 percent on Wednesday due to potential additional write-downs, and other expenses related to the tough mortgage market.
The New York-based bank has not been as severely affected by the housing and credit market crisis as other Wall Street firms. It has written down only $3.75 billion in bonds during the current market turmoil which began last summer. Rivals Citigroup and Merrill Lynch have written down much larger sums.
An poll of analysts by Thomson Financial found that on average, experts expect JP Morgan to earn 66 cents per share on revenue of $16.97 billion. JPMorgan is expected to write down $2.5 billion on Wednesday, according to the analyst Jeff Harte of Sandler O'Neill & Partners LP.
In the first quarter JP Morgan said it would buy investment bank rival Bear Stearns Cos. for $10 per share after an initial bid of $2 per share.
JPMorgan said it went through with deal after the Federal Reserve Bank agreed to loan Bear Stearns $30 billion, with JPMorgan being responsible for the billion.