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14th October 2011

JPMorgan Q3 profit down a little

JP Morgan Chase reported Q3 net income of $4,262m (€3,096m £2,710m $4,262m ¥327.5bn Y27,101bn) for Q3 and $15,248m (€11,077m £9,696m $15,248m ¥1,172bn Y96,958m) for the 9 months. The profits represented a FALL of 4% and an INCREASE of 22%. It is worth noting the continued beneficial effect on the Year on year comparisons of the falling loan loss provisions with the pre-provision fall being 25% and 15% respectively.


In what was almost the only negative statement in the report the bank reported on the "Challenging investment banking and capital markets environment". It then continued on the positive note that the Firm maintained its #1 ranking for Global Investment Banking Fees year-to-date.


The bank is lending at a faster rate and employing more than it was a year ago. It reports:

- Over $1.3tr in new and renewed credit provided to and capital raised for consumers, corporations, small businesses, municipalities and not-for-profits year-to-date:

- Small business loan originations of $12.6 billion, up 71% compared with prior year-to-date and 133% compared with the same period in 2009

- Middle-market loans of $41.5 billion, up 18% compared with prior year

- Trade finance loans of $30.1 billion, up 69% compared with prior year

- Increased U.S. employee headcount year-to-date by more than 13,200; over 2,200 military veteran hires year-to-date


After the strong start to the year with significant profit increases the market was disappointed with the figures and the first reaction was to sell shares with the price falling almost 2%. Given the current market conditions the bank's performance is still likely to exceed that of many other banks reporting over the next month.



SELECTED INCOME STATEMENT DATA 3Q11 3Q10 Change
$m $m %
Total net revenue 23,763 23,824 8
Total noninterest expense 15,534 14,398 -13
_________________________
Pre-provision profit 8,229 9,426 -25
Provision for credit losses 2,411 3,223 -4
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NET INCOME 4,262 4,418 -4

9 months of 2011 2010 Change
$m $m %
Total net revenue 75,763 76,596 0
Total noninterest expense 48,371 45,153 7
_________________________
Pre-provision profit 27,392 31,443 -13
Provision for credit losses 5,390 13,596 -60
_________________________
NET INCOME 15,248 12,539 22