JPMorgan Chase reports $3.3 billion profit

By David Ellis, staff writer


NEW YORK (CNNMoney.com) -- Profits at JPMorgan Chase jumped 55% from a year ago to $3.3 billion on the back of the bank's Wall Street business and an improvement in the overall economy.

The first of the nation's top banks to report first-quarter results, JPMorgan Chase said Wednesday it earned 74 cents a share during the first quarter, easily topping what investors were anticipating.

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Even as its consumer-banking business weighed on its latest results, JPMorgan Chase managed to deliver better-than-expected profits in the latest quarter.
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JPMorgan Chase shares, which climbed as much as 3.4% during Wednesday's session, are up sharply from a year ago.

Consensus estimates from analysts were for the New York City-based bank to record a profit of 64 cents a share, according to Thomson Reuters.

Powering the firm's latest results was its investment banking business, particularly trading activity within its fixed income division. The investment banking unit booked $2.5 billion in profits during the quarter.

An improvement in the broader U.S. economy also helped alleviate some of the troubles within the company's traditional lending businesses, which have been buffeted by the high level of unemployment and persistent weakness in the housing market.

"There is a clear and broad-based improvement in economic factors in the U.S. and around the world," said Jamie Dimon, the company's chairman and CEO. "I think the chance of a double dip is rapidly going away."

Delinquencies within the bank's mortgage, auto and student lending business, for example, fell during the quarter. JPMorgan Chase said the percentage of its credit card holders who were 30 days behind on a payment was 1.47%, down from 1.75% in the fourth quarter.

The bank scaled back on the number of reserves for future loan losses in its credit card division by $1 billion, suggesting that troubles within that business could soon start to moderate.

Standard & Poor's analyst Matt Albrecht wrote in a note to clients Wednesday that the bank should be able to further reduce provisions for loan losses because of the improved credit trends.

Still, JPMorgan's consumer banking and credit card business both ended the quarter in the red, with its persistently troubled card division delivering a loss of $303 million.

But when pressed about his outlook for the credit card business, Dimon said that it could very well turn profitable by year end.

The company also reiterated that it planned on adding 9,000 jobs in the U.S. across a number of different areas, including its private and retail banking businesses, hinting that it is priming itself for growth. The firm however, did not provide a time frame as to when those workers would be hired.

JPMorgan's latest results extend the good fortune the firm has enjoyed throughout the crisis. Unlike many of its peers, the bank has managed to stay profitable over the past two years.

Its latest results are also likely to set a high bar for the rest of the nation's top banks due to report in the coming weeks.

On deck is rival Bank of America (BAC, Fortune 500), which will deliver its results before Friday's opening bell. Citigroup (C, Fortune 500) and Wells Fargo (WFC, Fortune 500) are scheduled to report their first quarter results next week.

JPMorgan Chase (JPM, Fortune 500) shares gained nearly 3% in midday trading Wednesday on the news. To top of page

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