JPMorgan Chase Reports Q3 Profit of $3.6 Billion Powered By Investment Banking

October 15, 2009 by · Leave a Comment
Filed under: Industry News 

If you get basically free money from the central bank and have mark-to-market accounting rules changed so you don’t have to realize many losses, then you bet your bottom dollar you can make a profit as a commercial/investment bank.  Heck, if you can’t make money in that environment then you are in the wrong business.

One piece of interesting information is that JPMorgan set aside another $2 billion in reserves in anticipation that their consumer credit card division will be taking some more hits in the future.   This brings the total to over $31 billion in bank reserves against potential losses.  CEO Dimon made a statement that he thought consumer credit may be stabilizing but he was still cautious.  With unemployment expected to rise in the coming months, it is very likely that we will see increasing credit card and loan defaults in the coming quarters.

Also many analysts still believe with the Dow at 10,000, we have come too far too fast and the valuations are not realistic for the mode our economy is in.  Some estimates say we should see a 15-20% correction to bring it in line to more realistic valuations but at the moment they see people chasing the market and it would not be surprising to see it increase from here regardless.

NY Time Article

4 U.S. Banks Repay $54.7 Billion in Tarp Bailout Funds

June 17, 2009 by · Leave a Comment
Filed under: Industry News 

This is a good sign, I am glad to see these fund get repaid back.  This is going to create pressure on the banks that do not have the ability to repay these government loans.  In a sense, this has now separated the banks into two categories (TARPed and Non-TARPed) and one categoery is clearly stronger than the other.  This should let the market now reward or punish the good and bad banks we have.

If you can not repay these loans then clearly you are currently in a weaker position than your rivals.  In the business of banking, 95% of the business is based on “trust” and “confidence” and when you are in short supply of both, then you usually go out of business.   I want too see only strong and prudent banks surviving.   I love good banks and despise bad ones.  In all my history on banking I have read, this is the way of the world and it should not change now.

News (Bloomberg):

JPMorgan Chase & Co. and four of the nation’s largest banks repaid $54.7 billion to the U.S. Treasury’s bailout fund in a step toward ridding themselves of government restrictions on lending and pay.

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JPMorgan to gain $29 billion in income off bad WaMu loans and accounting change

May 27, 2009 by · Leave a Comment
Filed under: Industry News 

Interesting how an accounting change can give so much benefit to a bank that had a bundle of bad loans on its books.  I would like to know more about the loan that are in question and if they figure they will become or stay current in the future or if this is using the losses to offset tax liabilities?

I was on the conference call with JP when they announce the Washington Mutual acquisition and what I can tell you is that they were very very happy when announcing the deal.  They talked about how low they paid for WaMu’s “good” assets and now matter how they looked at this purchase, it would be very beneficial to JP Morgan Chase in the future and you know what, I believe it.

News (Bloomberg):

JPMorgan Chase & Co. stands to reap a $29 billion windfall thanks to an accounting rule that lets the second-biggest U.S. bank transform bad loans it purchased from Washington Mutual Inc. into income.

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JPMorgan expects to eliminate 12,000 jobs from WaMu integration

February 26, 2009 by · Leave a Comment
Filed under: Industry News 

It was to be expected to see more workforce reduction after this major acquisition purchase.  JPMorgan got an excellent deal in the purchase of Washington Mutual.  They purchased largest base of retail obanking deposit in the country for a fraction.   I have noticed all the marketing is getting slowly changed to the Chase brand.

News:

JPMorgan Chase & Co said it expects to cut 12,000 jobs as it integrates the former Washington Mutual Inc, 2,800 more than its previous estimate.  The second-largest U.S. bank also said on Thursday it expects about $2.75 billion of savings from Washington Mutual, offset by $750 million of new investments. Retail banking chief Charlie Scharf said the bank expects to achieve most of the savings by the end of 2009, sooner than originally thought.

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JPMorgan Chase to cut 3,400 WaMu jobs in Seattle

December 1, 2008 by · Leave a Comment
Filed under: Industry News 

Well this is a lost for Seattle, I personally have a couple friends that I am trying to reach to see what their fate is. You know what they say, “s&%t closest too home, hits you the hardest”.

JPMorgan Chase said it will eliminate 3,400 jobs at Washington Mutual’s banking operations in Seattle.

Of that total, 1,500 jobs are being eliminated now, with those employees to be gone by the end of January. Another 1,900 employees will stay on in temporary, transition jobs that will disappear next year.

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