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JPMorgan Profit Beats Estimates, Capital Ratio Strong

by pankaj kumar | January 15, 2009 at 04:40 am

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Something started better in gloomy condition JP Morgan was one of the beatendown company in financial meltdoun.Beter than expected result wil definitely give some oxygen to the sentiments in the finencial market.

JPMorgan Chase beat estimates in the fourth quarter, reporting earnings per share of 7 cents, or $702 million, while full-year 2008 net income was $1.37 per share, or $5.6 billion

"Our fourth-quarter financial results were very disappointing, driven by a loss in investment banking largely attributable to continued markdowns on leveraged loans and mortgage trading positions, as well as weak trading results," Jamie Dimon, Chairman and Chief Executive Officer, said in a statement.

Analysts had expected no profit.

JP Morgan had $2.9 billion net markdowns due to leveraged lending exposures and mortgage-related positions in the investment bank in the fourth quarter.

The banks said it had $1.1 billion an after tax benefit from merger-related items in the fourth quarter and a $4.1 billion increase to loan loss reserves.

The increase resulted in coverage ratios of 4.24 percent for consumer businesses and 2.64 percent for its wholesale businesses, the bank said.

As of December 31, 2008, Tier 1 capital ratio was estimated at 10.8 percent, JPMorgan said