JPMorgan Chase & Co. reported a 67 percent jump in first quarter earnings Wednesday on solid growth in investment banking fees and a drop in losses in its credit card portfolio.
The New York bank earned $5.6 billion, or $1.28 per share, compared with $3.3 billion, or 74 cents a share in the same period last year. The profits at JPMorgan, the first bank to report earnings, were way ahead of the $1.15 per share analysts surveyed by FactSet were expecting.
Revenue fell to $25.2 billion from $27.7 billion in the same period last year.
The slump in real estate continued to weigh heavily on JPMorgan’s results. The bank increased its provision for mortgage-related losses by $1.1 billion.
Jamie Dimon, the CEO of JPMorgan, said in a statement that the bank’s mortgage losses were “extraordinarily high,” adding: “Unfortunately, these losses will continue for a while.”
JPMorgan Chase & Co.’s profits included $2 billion from reducing its credit card loan reserves. Delinquency fell among the bank’s credit card customers, allowing JPMorgan to lower its estimates of future losses.
Investment banking revenue fell to $8.2 billion from $8.3 billion in the prior year. However, much of the profits were generated from a 23 percent increase in investment banking fees to $1.8 billion. That included record debt underwriting fees of $971 million, up 33 percent from the prior year, and a 41 percent increase in advisory fees to $429 million.
The portion of JPMorgan’s customers who were late by 30 days on their mortgage payments fell to 6.2 percent, compared with 7.3 percent a year earlier. However, its home equity loan portfolio had losses of $720 million, while its sub-prime mortgage losses were $186 million.
In the quarter, the bank lost $1.1 billion from increased costs to service mortgages, an expense of $650 million due to costs from foreclosures and mortgage repurchase losses of $420 million.
The stronger than expected results sent JPMorgan’s stock up 1.8 percent to $47.49 in pre-market trading. Other major banks also rose. Bank of America Corp. rose 1.3 percent to $13.63, and Citigroup Inc. rose 1.1 percent to $4.60.