JPMorgan Chase posts better-than-expected profit

NEW YORK - JPMorgan Chase said Thursday it earned $2.14 billion for the first quarter, thanks to rising deposits and lower borrowing rates. The profit was 10 percent lower than last year, but better than expected.

JPMorgan has not posted a quarterly loss since the financial crisis began.

Like other banks, JPMorgan's loans are still seeing defaults increase. Credit costs amounted to $10 billion, JPMorgan said.

But the company is benefiting from a jump in mortgage refinancing and deposits, as well as low interest rates. When a bank can borrow cheaply, it can profit more from lending and trading.

JPMorgan says it earned $2.14 billion in the first quarter, or 40 cents per share, on record revenue of $26.9 billion. That's down from net income of $2.37 billion, or 67 cents per share, a year earlier. But analysts predicted a profit of 32 cents per share, according to Thomson Reuters.

The report did little to revive stock futures in early trading, as JPMorgan Chase has long been considered one of the nation's stronger banks. It's the only one of the top four U.S. banks _ JPMorgan, Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. _ to weather the financial crisis so far without a quarterly loss.

Still, the results served as the latest sign that while loan losses are surging across all regions and types of debt, low interest rates and an upturn in mortgage lending might help many banks offset those losses. Last week another big bank, Wells Fargo, surprised investors by announcing a record $3 billion quarterly profit.

"It is reasonable to expect additional increases to credit reserves if the economic environment worsens," said CEO Jamie Dimon in a statement. "Yet, we are confident that even a highly adverse economic scenario would not compromise our overall strength and stability _ or our ability to enhance our franchises."

JPMorgan said it extended $150 billion in new credit during the first quarter.

JPMorgan's investment bank pulled in a record profit of $1.6 billion on record revenue of $8.3 billion. A year ago, before JPMorgan bought the nearly-collapsed investment bank Bear Stearns, that division posted a loss.

Its retail banking unit earned $474 million, compared with last year's loss of $311 million. That business was helped by another acquisition _ the thrift Washington Mutual Inc., which JPMorgan bought last fall.

The WaMu acquisition also helped drive JPMorgan's commercial banking unit's income up 16 percent to $338 million.

JPMorgan's card division, however, did poorly because of surging defaults. It posted a loss of $547 million, compared with a profit of $609 million last year.

Asset management, Treasury and securities services, and the corporate lending unit also did worse in the first quarter than in the same period last year.

JPMorgan's stock is up 3 percent for the year, but still down 39 percent since its 2007 peak in May of $53.20.

JPMorgan is one of several bailout recipients, including Wells Fargo, Morgan Stanley and Goldman Sachs Group Inc., expressing interest in repaying their government debt soon. JPMorgan got $25 billion from the government late last year to keep the financial system stable and increase lending.

A service of the Associated Press(AP)