Bank’s profit falls 10 percent
JPMorgan Chase Tower
JPMorgan Chase & Co posted a lower profit this quarter than it did a year ago. Nonetheless, it says it will pay back $25 billion in TARP funds as soon as possible. Though it posted a profit loss, it wasn’t as big a drop as analysts expected.
It’s payback time
So JPM’s bailout funds turned out to be only a short-term loan. That’s fabulous, right? A little snippet from “The Guardian” struck me as a bit odd. CEO Jamie Dimon said he would pay back federal loans “as soon as the government allowed it.”
“We’d like to repay it as soon as possible,” said Dimon. “We’re waiting for guidance from the government of the United States. We want to do what’s in the interests of the U.S. as well as in the interests of JPMorgan.”
After all of the cash advances the government has handed out, I should think they’d send someone over there to pick it up right away.
JPM on the books
JPM pulled in a $2.14 profit in the first quarter of 2009, according to the Wall Street Journal. To prepare for impending mortgage loan modification, it has set aside $4.2 billion to cover future loan losses. Though JPM’s profit fell about 10 percent compared to the same quarter last year, its revenue shot up 48 percent to more than $25 billion.
What’s their secret?
The Wall Street Journal reports that JPM’s relative success mainly was due to a recovery in securities trading.
In the same boat
Two other large financial institutions also surprised analysts with solid first quarters.
Goldman Sachs Group Inc. on Monday reported a $1.7 billion profit, reversing a $2.3 billion fourth quarter loss. And last week, Wells Fargo & Co. reported a $3 billion first quarter profit.
Goldman Sachs’ benefited from fixed income trading, and Wells Fargo got a boost thanks to its acquisition of Wachovia Corp.
It’s good they are returning to a profit of some kind, and excellent that they want to repay the taxpayers. I think they all definitely should. Perhaps these Wall Street guys aren’t as incompetent as we’ve all been led to believe. Unless they are, and they’re just getting lucky.