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Source: Reuters -
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JPMorgan Chase & Co said record investment banking and trading results drove quarterly profit 36% higher, topping Wall Street forecasts, but reported a surge in consumer credit losses that foreshadows deeper problems on Main Street.
Though the second-largest US bank is among the nation's healthiest major lenders, it more than doubled the amount set aside for bad loans, to $US9.7 billion. JPMorgan expects its credit card business to lose money this year and next, and sees higher commercial real estate losses for several quarters.
"We're still obviously in a pretty big recession," Chief Executive Jamie Dimon said on a conference call. He said rising unemployment will put upward pressure on credit losses.
Results nonetheless benefited from improving credit markets and regulators' efforts to stimulate the economy by keeping borrowing costs low, bolstering mortgage and other lending.
"The bank has done reasonably well on the trading side, and less well on the home and private lending side," said Peter Dixon, an economist at Commerzbank in London.
In morning trading, JPMorgan shares were down 41 US cents, or 1.13%, at $US35.85. The KBW Bank Index was down 1.37%. Through Wednesday, JPMorgan was up 15% in 2009, while the index was down 14.4%.
