JP Morgan Chase & Co. is reporting a 68% increase from the sale of their corporate trust unit, as well as strong investment growth. Credit quality became weaker, however. This suggests that the investment bank’s individual and commercial clients, like with many major banks, had a more difficult time paying their bills.
JP Morgan Chase is the third largest bank in the U.S. For its 4th quarter, the bank reported a net income of $4.53 billion, up $2.7 billion from the previous year. Revenue was $16.05 billion. According to analysts, 2007 is looking “modestly better than expected” for JP Morgan Chase.
Meanwhile, Wells Fargo & Co, the fifth largest bank in the country, reported a 13% rise in fourth quarter earnings. Credit losses for Wells Fargo also grew.
According to JP Morgan Chase’s CEO Jamie Dimon, “All of our six businesses have been getting stronger almost every quarter,” he said. He also said that the integration of the bank branches JP Morgan Chase had acquired from Bank of New York was going well. The branches were traded for JP Morgan Chase’s corporate trust unit. Dimon did warn, however, that there would be losses in the coming quarters as well as higher loan delinquencies.
In the investment bank’s retail financial services, net income decreased from $803 million to $718 million. These figures were attributed to acquiring Bank of New York’s consumer business, a mortgage loan portfolio loss, and the sale of their insurance business last July.
Card services for JP Morgan Chase rose to $719 million from $302 million during the 4th quarter in 2005. JP Morgan Chase’s reported net income for 2006 was $14.44 billion. Annual net income in 2005 was $8.48 billion.
Despite the discovery of unprecedented fraud on Wall Street, brokerage firms continue to earn unbelievable – even unconscionable profits! Self-regulators are shrinking their role (as the National Association of Securities Dealers and New York Stock Exchange merge their regulatory units), and the Securities and Exchange Commission appears to be losing its regulatory power over financial advisors as well as over the sale of insurance policies and annuities which are nothing more than mutual funds with an “insurance wrapper”. Meanwhile, unregulated “hedge funds” flourish with little or no oversight. The bottom line is: “On Wall Street, Crime Pays!”
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