JP Morgan Chase posted a 67 per cent increase in first-quarter earnings, topping Wall Street expectations, as it set aside less money to cover bad loans.
But the news was not all positive for the second-largest US bank, as it said it was still suffering from high mortgage losses. The bank's book of consumer loans shrank by 10 per cent in the quarter, and loans to companies did not rise enough to offset that.
JPMorgan shares rose 1.2 per cent in premarket trading. JPMorgan is the first of the big banks to post quarterly results, and its earnings often give investors a hint of what to expect from other financial companies.
"These were good numbers. They beat estimates, but not massively. I think the financial sector generally is holding up but is not performing quite as well as we would like to see," said Peter Dixon, an economist at Commerzbank in London.
The bank set aside just $1.17 billion to cover bad loans, down from $7.01 billion a year earlier.
Chief executive Jamie Dimon is often credited with skillfully piloting his bank through the financial crisis, but many investors are now looking for signs of revenue growth. In recent quarters, the bank has boosted profit mainly by setting aside less money to cover credit losses, rather than by generating more money from new customers.
Pre-provision profit, a measure of how much money the bank earns before accounting for credit losses, fell 20 per cent to $9.23 billion. Loans on the bank's books fell 4 per cent to $686 billion, indicating demand for loans is tepid compared with how quickly existing loans are being repaid.
Reuters
