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European debt crisis hits JPMorgan profit DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1

European debt crisis hits JPMorgan profit

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European debt crisis hits JPMorgan profit Empty European debt crisis hits JPMorgan profit

Post by silkysand Sat Jan 14, 2012 12:57 am

http://www.gulf-daily-news.com/NewsDetails.aspx?storyid=321573


NEW YORK: The drag of the European debt crisis on trading and corporate deal-making pulled down JPMorgan Chase's profit, sending bank stocks tumbling yesterday, but the largest US bank by assets said the domestic economy was strengthening.

Chief executive Jamie Dimon said the New York-based bank was seeing signs of improvement in credit quality as well as loan demand from corporations and consumers in the US.

"We see a mild recovery which actually might be strengthening, and it's broad," Dimon said

"Hopefully, it will add to more jobs. We have seen jobs growing ... it's not enough but it could be self-sustaining."

But Dimon sounded renewed alarm on the European debt crisis.

"I would put myself in the 'increasingly worried' category," he said.

His comments came shortly before a senior euro zone government source said credit rating agency Standard & Poor's was set to downgrade several euro zone countries, not including Germany, yesterday. The report sent the euro and US markets lower.

JPMorgan is the first major US bank to announce results for the fourth quarter. Its figures show Wall Street firms such as Goldman Sachs Group and Morgan Stanley are in for a tough quarter as investment banking suffers.

Others such as Bank of America and Citigroup, which also report results in the coming days, could benefit from the stronger business loan demand that JPMorgan experienced but could also face problems in investment banking and housing loans.

JPMorgan's results "show that there are major headwinds against the banking industry and it requires a strong management team to battle the headwinds", said Rick Meckler, president of investment firm Libertyview Capital Management in New York.

"The bigger negatives tend to be the housing and mortgage situation and investors questioning, 'Have we really hit bottom in this sector or is this just a black hole?'"

"We all knew the fourth quarter would be difficult," said Gary Townsend of Hill-Townsend Capital.

"But the overall economic outlook has been improving from an economic standpoint starting in December."

JPMorgan said fourth-quarter net income was $3.72 billion, or 90 cents a share, down from $4.83bn, or $1.12 a share, a year earlier.

Wall Street analysts, on average, had expected 90 cents a share.

Revenue declined 17 per cent to $22.2bn on an adjusted basis, missing the Wall Street estimate of $23bn. Investment banking revenue fell 30pc to $4.36bn, hurt by a 39pc drop in underwriting and advisory fees, a 13pc decline in fixed income, and a 31pc fall in equity markets.
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