JP Morgan

JP Morgan

JPMorgan Chase & Co (JPM.N) drastically cut the amount of money set aside for bad loans, allowing it to boost first-quarter profit by two-thirds but prompting questions about whether the results can be repeated.
The bank's book of consumer loans shrank by 10 percent in the quarter, and loans to corporate customers did not grow enough to make up for it. The No. 2 U.S. bank also took $1.75 billion of charges linked to collecting payments on bad mortgages and foreclosures, and said an upcoming settlement with regulators over mortgage servicing abuses could force it to hire as many 3,000 people.
The quarterly results were the first from a major Wall Street bank, and although they beat expectations, they raised investor concerns about lending profits. Bank shares broadly edged lower.
Analysts said a good deal of JPMorgan's ability to grow in the future will depend on growth in the global economy, which will trigger more demand for loans.
"Obviously, JPMorgan can't count on gains from (setting aside less money) in the future. If the bank can't get their loan book growing in a significant way, they face a number of headwinds," said Sean Egan, managing director at Egan-Jones Ratings.

JP Morgan