According to
an article on Reuteus, JPMorgan
Chase & Co posted far weaker-than-expected quarterly profit.
The bank was consistently profitable during the financial crisis, but is
struggling to figure out how to navigate the current environment.
Earlier this
week, JPMorgan report possible weaker earnings due to litigation expenses.
However, Friday's results showed how the bank's troubles appear to be more than
just legal settlements and meeting new rules, and into areas more fundamental
to the business, such as loan demand and trading volume. “Most of the bank's
big businesses, including commercial lending and credit cards, delivered lower
profits. JPMorgan's bond trading revenue plunged 21 percent, and mortgage
lending revenue fell 84 percent from the same quarter last year.”
JPMorgan’s CEO
remains optimistic, however, “the business will grow
over the next decade or two.”
Mortgage
banking net income and production revenue drop significantly compared to a year
earlier. U.S. mortgage lending has cooled after rising rates in the second half
of last year have given fewer homeowners reason to refinance their loans. Wells Fargo
& Co, the biggest U.S. home lender, also reported results Friday
and said its income from mortgage banking fell 46 percent from a year earlier.
This weak
earning from JPMorgan shows the financial sector may expect a
difficult time ahead because when investors and consumers are still uncertain
about the state of the economy. Lower mortgage is also a big concern for the
economy, because the housing sector is usually the one that helps the economy
recover. However, not all banks are suffering weak earning. In contrast,
first-quarter earnings at Wells Fargo, less dependent on such Wall Street
profit generators, rose 14 percent, fueled in part by gains on one-time items
such as auto lending and loans to corporations.
http://www.reuters.com/article/2014/04/11/us-jpmorgan-results-idUSBREA3A0RB20140411
1 comment:
Such results can be expected specifically from JPMorgan, which absorbed many of the firms that failed in the recession. Consequently, it might take them a while longer to recover.
Post a Comment