THE ASSOCIATED PRESS
Published — Saturday 13 July 2013
Last update 13 July 2013 5:33 am
NEW YORK: JPMorgan Chase, the biggest US bank, says its second-quarter earnings surged from a year ago as profits from investment banking grew.
The bank made $ 6.1 billion in the second quarter after stripping out payments to preferred shareholders. That was up 32 percent from the same period a year ago, when it made $ 4.6 billion. Profits in the year-ago period were affected by a trading loss.
The earnings were equivalent to $ 1.60 per share. That exceeded the estimates of analysts polled by FactSet, who had forecast earnings of $ 1.44 per share.
Revenue in the period grew by 14 percent to $ 25.2 billion. That compared with $24.9 billion forecast by analysts. JPMorgan's profits from investment banking surged 19 percent to $ 2.8 billion, driven by higher fees for underwriting debt and stock offerings as financial markets revived.
Average total deposits rose 8 percent to $ 389.5 billion from the same period a year ago. Mortgage loan applications rose 37 percent from the prior year to $ 66.9 billion, reflecting an increase in refinancing activity.
The bank also reduced its provision for loan losses in its consumer banking division by $ 1.5 billion as the number of customers failing to repay their loans remained low.
Despite the surge in profits, JPMorgan CEO Jamie Dimon said in a statement that loan growth remained "soft." That's a sign business and consumers are still wary of taking on more debt despite the Federal Reserve's low-interest rate policies.
"However, we continue to see broad-based signs that the US economy is improving," Dimon said. "We are hopeful that as jobs are added and confidence builds, the US economy will strengthen over time."
JPMorgan earnings were hit a year ago after it was forced to increase its loss estimates from a bad trade. The soured bet ended up costing the bank more than $ 6 billion last year and drew sanctions from federal regulators. Dimon, who was forced to appear twice before congress to apologize and explain the loss, also had his pay cut by more than half to $ 11.5 million.
The CEO, who also holds the job of chairman at the bank, survived a vote May 21 that would have called on him to give up his dual role following the trading loss.
JPMorgan's stock was little changed at $ 55.14 in pre-market trading. The bank's stock is trading close to its highest in more than a decade and is up 25 percent this year.