It's kind of amazing that any bank is earning a profit these days. But JPMorgan Chase (NYSE: JPM) pulled it off -- making a profit of $527 million -- 84% less than last year at this time. Bad loans are the culprit -- leading to $5.8 billion in write-downs, losses and credit provisions. And JPMorgan's outlook for the next few quarters is not upbeat.
What I find most interesting about its numbers is that one of its lines of business saw a boost in revenue and profit. In particular, its investment-banking division made $882 million in the third quarter -- 198% more than last year -- and its revenue rose $1.1 billion. Unfortunately, its retail and credit card units suffered. Retail bank earnings fell 61% to $247 million and its credit-card division's $292 million in profit was 63% below last year's.
Although its CEO is downplaying expectations, I think that JPMorgan will benefit from the new two-tiered banking system created by the $250 billion capital infusion plan. Banks that don't get enough government capital will lose deposit and loan business to the strongest players. JPMorgan -- which got $25 billion in taxpayer money -- will be one of the beneficiaries.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in JPMorgan securities.
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Reader Comments (Page 1 of 1)
10-15-2008 @ 9:56AM
infowarrior said...
Google videos that will give you the facts regarding our economic condition.The Energy Non-Crisis, by Lindsey Williams. America:Freedom To Fascism, by Aaron Russo. The Brotherhood of Darkness, by Dr. Stan Montheith. These are, in my opinion, must see videos for all who want to know the truth about our economic structure.