Banking giant JPMorgan reports big drop in profits

Linda Young – AHN News Writer

New York, NY, United States (AHN) – Wall Street banking giant JPMorgan reported a steep plunge in its quarterly earnings Friday morning caused by large losses in its investment banking and trading divisions.

JPMorgan is the nation’s largest bank by assets.

Bank officials reported that it earned $ 3.7 billion, or 90 cents per share, in the final quarter of 2011, down by 23 percent from $ 4.8 billion, or $ 1.12 per share, during the same quarter a year earlier.

The news caused shares of JPMorgan (JPM, Fortune 500) stock to fall by 3 percent in early trading.

Nevertheless, for the entire year of 2011, profit rose by 9 percent to $ 18.98 billion, compared with $ 17.37 billion for 2010.

Net income from investment banking fell by 52 percent to $ 726 million during the quarter. That drop includes a $ 567 million loss caused by a narrowing of the spreads between interest rates on certain assets.

However, JPMorgan said that without those debit valuation adjustments the investment banking division would have earned $ 1.1 billion.

Net income from its asset management business fell by 40 percent to $ 302 million in the fourth quarter.

However, there was brighter news in JPMorgan’s real estate division portfolio. That lost only $ 11 million in the fourth quarter, compared to a loss of $ 823 million a year earlier.

Article © AHN – All Rights Reserved

Economy, Business And Finance Stories

You can leave a response, or trackback from your own site.

Leave a Reply