JPMorgan Chase Reports First-Quarter 2008 Net Income of $2.4 Billion; Earnings Per Share of $0.68
JPMorgan Chase Reports First-Quarter 2008 Net Income of $2.4 Billion; Earnings Per Share of $0.68 Wednesday April 16, 6:59 am ET Tier 1 Capital Remained Strong at $89.6 billion, or 8.3% (estimated) -- Credit reserves further strengthened by $2.5 billion firmwide, of which $1.1 billion is related to home equity portfolio -- Investment Bank took markdowns of $2.6 billion, including markdowns on leveraged lending and prime, Alt-A and subprime mortgages -- Sale proceeds of $1.5 billion (pretax) on the sale of Visa shares in initial public offering -- Continuing underlying business momentum: -- Retail Financial Services grew revenue by 15% -- Investment Bank ranked #1 for Global Investment Banking Fees(1); and for the first time ever #1 for Global Debt, Equity and Equity-Related(2) -- Treasury & Securities Services increased earnings 53% -- Commercial Bank grew liability balances by 22% and loans by 18% -- Asset Management grew assets under management by 13% -- Announced the planned acquisition of Bear Stearns on March 16
NEW YORK--(BUSINESS WIRE)--JPMorgan Chase & Co. (NYSE: JPM - News) today reported 2008 first-quarter net income of $2.4 billion, compared with record net income of $4.8 billion in the first quarter of 2007. Earnings per share of $0.68 were down 49%, compared with record earnings per share of $1.34 in the first quarter of 2007.
Commenting on the quarter, Jamie Dimon, Chairman and Chief Executive Officer, said, “Our earnings this quarter were down significantly as market conditions and the credit environment remained challenging. The Investment Bank had markdowns related to leveraged lending and mortgages and increased loan loss reserves. Retail Financial Services again increased loan loss reserves related to home equity and subprime mortgages, as performance in these portfolios continued to deteriorate. However, the firm as a whole maintained solid business momentum and our capital position remained strong. Retail Financial Services, Card Services, Commercial Banking and Treasury & Securities Services all reported organic revenue growth and well-managed expense levels. We also added $2.5 billion to our allowance for credit losses (which now totals $12.6 billion), and maintained a strong 8.3% Tier 1 capital ratio.”
Commenting on the recent agreement to acquire Bear Stearns, Mr. Dimon remarked, “The Bear Stearns merger provides a unique opportunity to enhance our ability to serve clients by adding new capabilities in prime brokerage and clearing and by improving strength in equities, mortgage trading, commodities and asset management. We welcome the employees of Bear Stearns and look forward to working together to build increased franchise value.”
Discussing the firm’s outlook, Dimon said, “Our expectation is for the economic environment to continue to be weak and for the capital markets to remain under stress. These factors have affected, and are likely to continue to negatively impact, our firm’s credit losses, overall business volumes and earnings -- possibly through the remainder of the year, or longer. However, we are prepared to manage through this down part of the economic cycle, given the strength of our liquidity, credit reserves, capital and operating margins, and to successfully position our company well for the future.”