JPMorgan Chase posts earnings of $2.14b

April 17, 2009|Associated Press

NEW YORK - JPMorgan Chase & Co.'s first-quarter profit wasn't as good as last year's, but it told investors what they wanted to hear: Banking is not dead.

JPMorgan became the third big bank in a week to release upbeat earnings news, reporting yesterday that it earned $2.14 billion for the January-March period, thanks to both strong trading activity and banking to consumers. The company's performance added to the evidence that the financial industry is starting to recover from the losses caused by the credit crisis and the recession, even as banks still contend with rising loan defaults.

The bank's chief executive also said that it could pay back its $25 billion in government funding immediately, and that it has no intention of using the government's Public-Private Investment Program to sell so-called "toxic assets" such as mortgage-backed securities.

"Folks, it's become a scarlet letter," CEO Jamie Dimon said of government funding.

Banks that have accepted federal bailout funds are now subject to greater government scrutiny and limits on how much they pay their top executives.

JPMorgan said it's benefiting from growth in deposits, a rise in mortgage refinancings, and low interest rates that allow it to borrow cheaply and then charge customers more for loans.

The company followed Wells Fargo & Co. and Goldman Sachs Group Inc. in reporting that earnings improved during the January-March period.