JPMorgan Chase & Co on Friday reported lower earnings due to a drop in its mortgage and trading businesses as the US banking giant seeks to turn the corner after costly legal settlements.
JPMorgan, one of the first major US companies to release first-quarter results, said its net income was US$5.3 billion, down 19 percent from a year ago. Key factors behind the decline included a big drop in mortgage banking income, lower earnings from fixed-income trading and a rise in provisions in case of credit losses.
The earnings translated into US$1.28 per share, well below the US$1.40 expected by Wall Street. Revenues came in at US$23.86 billion, missing estimates of US$24.53 billion.
JPMorgan chief executive Jamie Dimon said the results were “good” given the industry-wide headwinds in trading and mortgages.
“We have growing confidence in the economy — consumers, corporations and middle-market companies are in increasingly good financial shape and housing has turned the corner in most markets — and we are doing our part to support the recovery,” Dimon said.
Net income in mortgage banking was US$114 million, down US$559 million from last year. The bank has projected lower mortgage income for the year and has trimmed staff handling mortgage finance.
Revenue from fixed-income trading fell 21 percent to US$3.8 billion. JPMorgan had signaled weak performance on its trading desk, but the figures were still weaker than many analysts expected.
Total loans for the US’ largest bank by assets edged higher by just 0.2 percent to US$731 billion compared with a year ago.
The bank hiked its provision for credit losses to US$850 million, up US$233 million from last year.
JPMorgan’s disappointing first quarter results followed a year marred by massive legal settlements related to the company’s mortgage practices prior to the 2008 financial crisis, a major trading scandal in the bank’s London office and other controversies.
Dimon called the conditions of last year “painful and nerve-wracking” in a letter to shareholders last week. JPMorgan chief financial officer Marianne Lake said on Friday that there was “no discernible driver” for the drop in fixed-income trading, a major part of the bank’s business.
“It feels like the market consensus at the beginning of the year was set for a growth story that just didn’t happen the way it was expected to,” Lake said.
The bank did not offer an outlook on future financial results.
Shares of JPMorgan fell 3.2 percent to US$55.57 in late-morning trading on Friday, making it the weakest-performing stock on the Dow Jones Industrial Average.
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
An Indian factory producing iPhone components resumed work yesterday after a fire that halted production — the third blaze to disrupt Apple Inc’s local supply chain since the start of last year. Local industrial behemoth Tata Group’s plant in Tamil Nadu, which was shut down by the unexplained fire on Saturday, is a key linchpin of Apple’s nascent supply chain in the country. A spokesperson for subsidiary Tata Electronics Pvt yesterday said that the company would restart work in “many areas of the facility today.” “We’ve been working diligently since Saturday to support our team and to identify the cause of the fire,”
China’s economic planning agency yesterday outlined details of measures aimed at boosting the economy, but refrained from major spending initiatives. The piecemeal nature of the plans announced yesterday appeared to disappoint investors who were hoping for bolder moves, and the Shanghai Composite Index gave up a 10 percent initial gain as markets reopened after a weeklong holiday to end 4.59 percent higher, while Hong Kong’s Hang Seng Index dived 9.41 percent. Chinese National Development and Reform Commission Chairman Zheng Shanjie (鄭珊潔) said the government would frontload 100 billion yuan (US$14.2 billion) in spending from the government’s budget for next year in addition
Sales RecORD: Hon Hai’s consolidated sales rose by about 20 percent last quarter, while Largan, another Apple supplier, saw quarterly sales increase by 17 percent IPhone assembler Hon Hai Precision Industry Co (鴻海精密) on Saturday reported its highest-ever quarterly sales for the third quarter on the back of solid global demand for artificial intelligence (AI) servers. Hon Hai, also known as Foxconn Technology Group (富士康科技集團) globally, said it posted NT$1.85 trillion (US$57.93 billion) in consolidated sales in the July-to-September quarter, up 19.46 percent from the previous quarter and up 20.15 percent from a year earlier. The figure beat the previous third-quarter high of NT$1.74 trillion recorded in 2022, company data showed. Due to rising demand for AI, Hon Hai said its cloud and networking division enjoyed strong sales
RSS