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Published: Friday, 7/17/2009

JPMorgan reports 36% jump in profits

ASSOCIATED PRESS

CHARLOTTE - The banking industry has another winner.

JPMorgan Chase & Co. reported a 36 percent jump in second-quarter profits yesterday, easily surpassing analysts' forecasts as huge gains in its investment banking business outweighed higher losses from bad loans.

The results came two days after rival Goldman Sachs Group Inc. also posted surprisingly good results, solidifying the companies' position as the strongest players in the industry. Many other banks are still struggling to emerge from the worst of a credit crisis and a recession.

JPMorgan earned $2.72 billion for the April-June period, up from $2 billion a year ago. Investment banking profits more than tripled to $1.5 billion on higher underwriting fees and gains in its bonds business, though some analysts said it was unlikely to be sustained.

The profits came despite a $1.1 billion charge, or 27 cents a share, as JPMorgan repaid $25 billion in loans it received from the government. It was hit by an FDIC special assessment penalty.

Like Goldman Sachs, JPMorgan is seeing its business benefit from a smaller playing field. JPMorgan bought Bear Stearns Cos., and Lehman Brothers declared bankruptcy.

Meanwhile, JPMorgan also reported higher losses in consumer lending and credit cards. The bank said it set aside $9.7 billion for credit losses in the quarter. It also set aside $2 billion to cover future losses.



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