JPMorgan Chase more than doubles profits in 2009

US banking giant JPMorgan Chase kicked off a bumper results season for Wall Street titans after more than doubling profits in 2009. The figures revealed pay, bonuses and benefits across the bank as a whole rose 18% to $26.9 billion (€18.7bn).

JPMorgan – one of the strongest banks through the crisis – posted net income of $11.7bn for the year – up from $5.6bn.

The performance comes a day after President Barak Obama launched plans to claw back $90bn for the US taxpayers over 10 years in return for support given during the financial crisis.

JPMorgan, which has about 15,000 staff in Britain, swallowed up failed rivals Bear Stearns and Washington Mutual in 2008. This helped push revenues to a record $108.6bn.

The bank took $25bn from the US government at the height of the meltdown – which it has since paid back – but avoided the worst of the sub-prime meltdown and never posted a quarterly loss.

Chief executive Jamie Dimon however added that he remained cautious over the outlook.

“While we are seeing some stability in delinquencies, consumer credit costs remain high, and weak employment and home prices persist,” he said.

Despite rising bad debts at its retail arm, JPMorgan’s investment banking division generated almost two thirds of its overall profits as the company benefited from stock market rallies and fundraising by major companies and governments.

Compensation and benefits at the division were up 21% to $9.33bn compared with the previous year – representing about a third of the investment bank’s revenues.

But Wall Street banks will be braced for the president’s Financial Crisis Responsibility Fee as Obama pledged yesterday to get back every dime for the US taxpayer.

The levy on the liabilities of the banks – which could cost British banks with significant US operations a reported €11.3bn – will remain in place as long as it takes to get the money back, the president said.

In Britain, Chancellor Alistair Darling has unveiled a 50% tax on bank bonuses which is expected to raise more than £570 million – although it could be more if banks choose to maintain mega-payouts and stump up the tax.

Prime Minister Gordon Brown’s spokesman said the Treasury was studying Obama’s proposals, but stressed individual countries’ responses would depend on particular circumstances.

He acknowledged Darling’s temporary 50% levy on bonuses over €28,000 had been intended to encourage a change in behaviour, but said it had always been up to the financial institutions to decide for themselves whether they would reduce payouts or take the tax hit.

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