JPMorgan Kicks Off Bank Earnings With 33% Jump in Income

Andrew Klips |

JPMorgan, JPMJPMorgan 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.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
JPM JP Morgan Chase 66.59 0.94 1.43 16,918,577
LND Brasilagro Brazilian Agric Real Estate Co Sponsore 3.47 -0.02 -0.57 100
WFC Wells Fargo & Company 44.30 -0.07 -0.16 46,095,179

Comments

Emerging Growth

Lomiko Metals Inc.

Lomiko Metals Inc is an exploration stage company. It is engaged in the acquisition, exploration and development of resource properties. Its projects include Vines Lake project and Quatre - Milles…

Private Markets

Cloudera

Cloudera offers enterprises a new data platform built on the Apache Hadoop open-source software package. Hadoop is a data-management platform that can consolidate data in a single repository for comprehensive…

Cross Campus

With over 500 members and operating 80,000 square feet by summer 2016, Cross Campus is one of the country’s top ten shared, collaborative office or "coworking" operators in the US.…