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July 13th, 2013 
Peter Nolan 
The US’ biggest bank, JPMorgan Chase, says its second-quarter earnings surged 32% from a year ago.
Source: AAP
THE United States’ biggest bank, JPMorgan Chase, says its second-quarter earnings surged from a year ago as profits from investment banking grew.
The bank made $US6.1 billion ($A6.68 billion) in the second quarter after stripping out payments to preferred shareholders.
That was up 32 per cent from the same period a year ago, when it made $US4.6 billion. Profits in the year-ago period were affected by a trading loss.
JPMorgan’s profits from investment banking surged 19 per cent to $US2.8 billion, driven by higher fees for underwriting debt and stock offerings as financial markets revived.
Average total deposits rose 8 per cent to $US389.5 billion from the same period a year ago.
Mortgage loan applications rose 37 per cent from the prior year to $US66.9 billion, reflecting an increase in refinancing activity.
The bank’s mortgage originations rose 12 per cent to $US49 billion compared to a year ago, but fell 7 per cent from the previous quarter.
On a conference call with analysts, JPMorgan CFO Marianne Lake said the bank was confident it could increase its share of the mortgage market even as the boom in refinancing driven by falling interest rates comes to an end.
The bank also reduced its provision for loan losses in its consumer banking division by $US1.5 billion as the number of customers failing to repay their loans remained low.
The earnings were equivalent to $1.60 per share. That exceeded the estimates of analysts polled by FactSet, who had forecast earnings of $1.44 per share.
Revenue in the period grew by 14 per cent to $US25.2 billion. That compared with $US24.9 billion forecast by analysts.
Despite the surge in profits, JPMorgan CEO Jamie Dimon said in a statement that loan growth remained “soft”.
That’s a sign business and consumers are still wary of taking on more debt despite the Federal Reserve’s low-interest rate policies.
“However, we continue to see broad-based signs that the US economy is improving,” Dimon said.
“We are hopeful that as jobs are added and confidence builds, the US economy will strengthen over time.”
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