Profits double as JP Morgan Chase defies credit crunch

US banking giant JP Morgan Chase kicked off a bumper results season for Wall Street titans today after more than doubling profits in 2009.

US banking giant JP Morgan Chase kicked off a bumper results season for Wall Street titans today after more than doubling profits in 2009.

The figures revealed pay, bonuses and benefits across the bank as a whole rose 18% to $26.9bn (€18.7bn).

JP Morgan - one of the strongest banks through the crisis - posted net income of $11.7bn (€8.14bn) for the year - up from $5.6bn (€3.9bn).

The performance comes a day after President Obama launched plans to claw back $90bn (€62.6bn) for the US taxpayers over 10 years in return for support given during the financial crisis.

JP Morgan, which has about 15,000 staff in the UK, swallowed up failed rivals Bear Stearns and Washington Mutual in 2008. This helped push revenues to a record $108.6bn (€75.55bn).

The bank took $25bn (€17.4bn) 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, JP Morgan'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 (€6.4bn) 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 Barack Obama pledged yesterday to get back "every dime" for the US taxpayer.

The levy on the liabilities of the banks - which could cost UK banks with significant US operations a reported $16.3bn (€11.bn) - will remain in place as long as it takes to get the money back, the president said.

More in this section

Lunchtime News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up
Revoiced
Newsletter

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up