JPMorgan Chase posts $2.7bln net profit

Banking giant JPMorgan Chase on Thursday reported a net income of 2.7 billion dollars in the second quarter, a 36 percent increase over the same period last year, due to an increase in revenue.

JPMorgan Chase managed net revenue of 27.7 billion dollars during the second quarter, an increase of 8.0 billion, or 41 percent from the prior year, driven in part by “record” investment banking fees, the group said in a statement.

The net benefit translated to 28 cents per share, far above the four cents analysts had predicted. The market had also expected lower revenues of 25.9 billion dollars.

Despite the strong earnings, JPMorgan Chase chairman and CEO Jamie Dimon said “these results were negatively affected by the continued high levels of credit costs in consumer lending and card services, which we expect will remain elevated for the foreseeable future.”

In June, the company said it had repaid the US government in full for a 25-billion-dollars capital injection under the Troubled Asset Relief Program (TARP), and had paid a total of 795 million dollars in dividends on the preferred stock.

The repayment came after the Federal Reserve and Treasury agreed to allow some banks to begin reimbursing the government for capital injections begun last year in an effort to stabilize a shaky financial system.

Current-quarter earnings per share reflected a one-time, non-cash reduction of net income for common stockholders of 1.1 billion dollars, or 27 cents per share due to the repayment of the TARP preferred capital, JPMorgan Chase said.

The firm ended the quarter with “very strong” reserves, Dimon said.

The additions to the company’s reserves, he said, awarded it an “extremely high” loan loss coverage ratio of five percent.

“Throughout this crisis, we have remained committed to doing our part to help bring stability to the communities in which we operate and to the financial system overall,” the chief executive said.

During the quarter, “we continued to lend, extending approximately 150 billion dollars in new credit to consumer and corporate customers,” he added, noting the company had approved 138,000 trial mortgage modifications, bringing total foreclosures prevented since 2007 to 565,000.

He said the firm expected the number of prevented foreclosures to grow.

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