JPMorgan Chase Reports Second-Quarter 2011 Net Income of $5.4 Billion, or $1.27 Per Share
Revenue1 of $27.4 Billion, up 7% over Prior Year, up 6% over Prior Quarter
- Investment Bank reported strong earnings and solid client flows; #1 ranking for Global Investment Banking Fees year-to-date
- Commercial Banking reported record revenue and continued loan growth
- Solid performance across most other businesses
- Fortress balance sheet maintained: Basel I Tier 1 Common1 of $121 billion, ratio of 10.1%; estimated Basel III Tier 1 Common1 ratio of 7.6%; credit reserves at $29.1 billion, coverage ratio at 3.83% of total loans1
- Second-quarter results included the following significant items:
- $1.0 billion pretax ($0.15 per share after-tax) benefit from reduced loan loss reserves in Card Services
- $837 million pretax ($0.12 per share after-tax) benefit from securities gains in Corporate
- $1.0 billion pretax ($0.15 per share after-tax) expense for estimated costs of foreclosure-related matters in Retail Financial Services
- $1.3 billion pretax ($0.19 per share after-tax) of additional litigation reserves, predominantly for mortgage-related matters, in Corporate
- Over $990 billion in new and renewed credit provided to and capital raised for consumers, corporations, small businesses, municipalities and not-for-profits year-to-date; #1 Small Business Administration lender in the U.S.
- Hired more than 10,000 employees year-to-date
1 Presented on a managed basis. For notes on managed basis and other non-GAAP measures, see page 13.
NEW YORK--(BUSINESS WIRE)--JPMorgan Chase & Co. (NYSE: JPM) today reported second-quarter 2011 net income of $5.4 billion, compared with net income of $4.8 billion in the second quarter of 2010. Earnings per share were $1.27, compared with $1.09 in the second quarter of 2010.
Jamie Dimon, Chairman and Chief Executive Officer, commented: “Our second-quarter earnings reflected solid performance across most of our businesses. The Investment Bank delivered strong earnings across most products and maintained its #1 ranking in Global Investment Banking Fees. Commercial Banking reported record revenue and continued loan growth for the quarter. Retail Financial Services demonstrated good underlying performance in Retail Banking but continued to experience high losses for mortgage-related issues.”
Dimon continued: “We are pleased to report that our results for the quarter reflected continued improvement in credit trends across our consumer and wholesale portfolios. With respect to our credit card portfolio, delinquencies and net charge-offs improved, and we reduced loan loss reserves by $1.0 billion as estimated losses declined. We expect credit card net charge-offs to continue to improve next quarter as we approach a more normalized credit environment. Within our wholesale credit portfolio, credit trends appear to have normalized."
“With respect to our mortgage portfolio, delinquency and net charge-off trends improved modestly compared with the prior quarter; however, net charge-offs remained high, and we expect credit losses to remain elevated. We have been working hard to fix our problems and address past mistakes. We have already incurred significant costs, charged-off substantial amounts and established significant reserves for mortgage-related issues. Unfortunately, it will take some time to resolve these issues and it is possible we will incur additional costs along the way. However, in time, these costs will normalize as well.”
Commenting on the Firm’s balance sheet, Dimon said: “We maintained our fortress balance sheet, ending the second quarter with a Basel I Tier 1 Common ratio of 10.1%. Our strong and growing capital base enabled us to buy back $3.5 billion of stock during the second quarter, and we will continue to buy back stock opportunistically. We estimate that our Basel III Tier 1 Common ratio was approximately 7.6% at the end of the second quarter. This level is well in excess of what is required today under existing rules and is greater than the level we expect will be required under the proposed rules for up to five years, including the additional buffer for global systemically important financial institutions. Our strong capital position and significant earnings power will allow us to actively grow our business and rapidly meet any proposed Basel III requirements as they are phased in. We intend to keep our capital ratios approximately where they are as we do not see a need to manage to higher ratios ahead of time.”
Dimon also remarked: “Through the recession, we have helped hospitals, school systems, banks, state governments, countries and central banks, and we will continue to do so. During the first six months of 2011, JPMorgan Chase provided credit to and raised capital of over $990 billion for our clients. We originated mortgages to more than 360,000 people; we provided credit cards to approximately 4.6 million people; we lent or increased credit to more than 16,800 small businesses; we lent to more than 800 not-for-profit and government entities, including states, municipalities, hospitals and universities; we extended or increased loan limits to approximately 3,000 middle-market companies; and we lent to or raised capital for more than 5,000 other corporations. We are the #1 Small Business Administration lender in the U.S., with more loans made than any other lender. In 2009 and 2010, we lent more than $7 billion and $10 billion, respectively, to small businesses, and we have committed to lend at least $12 billion more this year. We remain committed to helping homeowners and preventing foreclosures. Since the beginning of 2009, we have offered 1,177,000 trial modifications to struggling homeowners.”
Dimon concluded: “Looking forward, we continue to see substantial opportunities for the company. We are building our international presence, with more bankers, branches and products to serve our multinational clients where they want to be served. In the U.S., we are also investing in new branches and adding bankers and salespeople, expanding the reach of our consumer and wholesale businesses.”
