JPMorgan Chase & Co. posted a second-quarter profit of $2.72 billion, a 36 percent jump that easily surpassed expectations as strength in its core consumer and investment banking businesses offset a jump in credit losses.
Shares of the New York-based banking giant fell 1 percent in premarket trading to $35.90.
JPMorgan, the second big financial institution in a week to release upbeat earnings news, reported net income of $2.72 billion, or 28 cents per share, up 36 percent from $2 billion, or 53 cents per share, a year earlier. Revenue rose 39 percent to $25.62 billion from $18.4 billion.
Earnings per share fell despite an increase in profit because the company had more stock outstanding in the most recent quarter ending June 30.
Analysts forecast earnings of 4 cents per share on revenue of $25.89 billion for the quarter.
The profit came despite a $1.1 billion charge, or 27 cents a share, as JPMorgan repaid in full $25 billion in loans it received from the government as part of the Troubled Asset Relief Program, or TARP. The bank was also hit by a 10-cents-a-share FDIC special assessment penalty.
CEO Jamie Dimon said he was "pleased" by the results, even as the company's latest numbers were weighed down by higher credit costs, particularly in the company's consumer lending and credit card businesses.
Results were driven by record investment banking fees and revenue in fixed income markets, much like rival Goldman Sachs Group Inc., which reported strong earnings on Tuesday. At JPMorgan's investment bank, revenue jumped 33 percent to $7.3 billion. The segment's profit more than tripled to $1.5 billion.
But that was offset by credit costs that remain high in consumer lending and card services. The bank said it set aside $9.7 billion for credit losses, up from $4.29 billion a year earlier but down from the first quarter's $10 billion.
Dimon said the company expects credit costs to "remain elevated for the foreseeable future."
Still, the company has continued to lend, Dimon said.
JPMorgan said it extended $150 billion in new credit to consumers, corporations, small businesses, municipalities and non-profits and has approved 138,000 trial mortgage modifications in the quarter, bringing total foreclosures prevented since 2007 to 565,000.
"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," Dimon said.
This program aired on July 16, 2009. The audio for this program is not available.