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JPMorgan Chase reports 67% increase in first-quarter profit

JPMorgan, the first of the major banks to report results, earns $5.6 billion, up from $3.3 billion a year earlier.

April 13, 2011|By Nathaniel Popper, Los Angeles Times

JPMorgan Chase & Co. posted a 67% jump in first-quarter profit thanks to an improving U.S. economy.

Revenue at the company, the first of the major banks to report its results for the period, was down from a year earlier. But the firm had to put aside much less money to cover anticipated customer losses, which underscored improving financial circumstances for businesses and consumers.

"There is a lot of money washing around the world, and obviously we are the beneficiary of that," Jamie Dimon, JPMorgan's chief executive, said during a call with analysts after releasing the earnings Wednesday.

The company had strong results in both its retail business and its investment bank, in contrast to recent quarters when one side of the firm often propped up the other.

JPMorgan earned $5.6 billion, or $1.28 a share, in the first three months of 2011, up from $3.3 billion, or 74 cents, in the first quarter of 2010.

The profit was somewhat higher than expected, leading JPMorgan's stock to open higher. But the shares fell for much of the session, closing at $46.29, down 35 cents, or 0.8%.

The biggest hit to the bank's balance sheet came from a payment the firm expected to make to settle a large investigation by state and federal officials into how the nation's largest banks have handled mortgages. The industrywide settlement was announced later Wednesday.

JPMorgan benefited from a recent surge in takeover activity. The company has played a role in most of the biggest deals — including AT&T Inc.'s proposed $39-billion purchase of T-Mobile USA Inc. — and its investment bank generated the largest profit of any division in the company.

The results also showed that JPMorgan's corporate customers have stepped up their borrowing, both from the bank itself and from the bond market, generating revenue for the bank either way.

For consumers, the bank provided less in loans than it did a year earlier. But improving household finances were good for JPMorgan's credit card business, which swung to a $1.343-billion profit in the latest quarter from a $303-million loss a year earlier.

nathaniel.popper@latimes.com

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