JPMorgan Kicks Off Bank Earnings With 33% Jump in Income

Andrew Klips  |

JPMorgan Chase & Co. (JPM), the largest bank in the world by assets, was the first big bank to report its financials from the first quarter of 2013, topping analyst predictions with a healthy surge in profits.

For the quarter, the banking giant reported revenue of $25.85 billion, down 3 percent from $26.76 billion in the first quarter of 2012. Net income improved to $6.53 billion, or $1.59 per share, from $4.92 billion, or $1.19 per share, in the year prior quarter.

Wall Street was anticipating EPS of $1.39 on revenue of $25. 86 billion.

The latest quarter included a $500 million, or 8 cents per share, pretax benefit from reduced credit card loan loss reserves in Card Services and a $650 million, or 10 cents per share, benefit from reduced mortgage loan loss reserves in Real Estate Portfolios.

Meanwhile, the company said that it is increasing its second-quarter dividend from 30 cents per share to 38 cents per share. The JPM board also authorized a $6 billion share repurchase program, starting in the second quarter and running through the first quarter of 2014.

In the first quarter of 2013, the company bought back $2.6 billion of its common stock.

Noting signs that the economy is healthy and getting stronger, JPM chairman and chief executive Jamie Dimon said, "JPMorgan Chase had a very good start to the year. All our businesses had strong performance, and our client franchises did exceptionally well. The Corporate & Investment Bank was #1 in fees, global debt and equity, syndicated loans, and announced M&A.”

The investment bank segment of the company saw a 28 percent expansion in profits to $2.61 billion. The division increased assets under its control by 8 percent to $19.3 trillion, keeping its position as the largest in the world.

Shares of JPM have given a stellar performance since recovering from the “London Whale” trading fiasco in 2012 that cost the company $6.2 billion, trekking in a near straight line upward since last June when shares bottomed at $29.96. In March, shares hit a new 52-week high of $50.68. Shares closed Thursday trading at $49.31, ahead 0.12 percent for the day.

The earnings beat may set the tone for other banks that will be reporting in coming days. Wells Fargo (WFC) delivered its earnings Friday morning after JPMorgan that showed the bank increased profits by 22 percent in the first quarter. WFC reported earnings of $5.2 million, or 92 cents per share, topping analyst expectations of 88 cents per share in earnings.

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