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JPMorgan beats forecasts, says WaMu absorption on target
April 17, 2009
JPMorgan Chase said in its quarterly earnings report that the integration of Washington Mutual into its Chase retail bank network is proceeding on schedule, and it projected heavy losses in the credit-card portfolio it acquired along with WaMu's banking operations.
JPMorgan became the third big bank in a week to release upbeat earnings news, reporting Thursday it had earned $2.14 billion for the January-March period, thanks to both strong trading activity and consumer banking.
Its profit of 40 cents per share topped analysts' expectations by 8 cents, according to Thomson Reuters The performance added to the evidence that the financial industry is starting to recover from the devastating losses from the credit crisis and recession, even as banks still contend with rising loan defaults.
The company, which bought the WaMu banking operations last fall, said it has completed the rebranding of 708 WaMu branch offices and 1,900 ATMs in California, and has closed nearly 300 branches in markets where Chase and WaMu overlapped. It expects 92 more closures by the end of this year.
WaMu branches in Washington and Oregon are now being re-signed and repainted. Employees in both states have been wearing Chase shirts and name tags for the past few weeks.
In its financial report, JPMorgan broke out few details of the former WaMu operations, except for its $25.9 billion credit-card portfolio.
The company said it expects losses in the WaMu portfolio to range between 18 and 24 percent by the end of 2009, compared with 9 percent or higher in Chase's legacy portfolio. The charge-off rate for the whole portfolio was 7.72 percent in the quarter; excluding the WaMu loans, the charge-off rate would have been 6.86 percent.
As of March 31, JPMorgan had 38,211 former WaMu employees on its 219,569-person payroll. Seattle-based WaMu employed about 43,200 people companywide when it was bought.
"Folks, it's become a scarlet letter," he said of government funding. Banks that have accepted bailout funds are subject to greater government scrutiny and limits on how much they pay their top executives.
JPMorgan earned $2.14 billion, or 40 cents a share, on record revenue of $25.03 billion in the first quarter. It earned $2.37 billion, or 67 cents a share, on revenue of $16.89 billion a year earlier.
Sourece: http://seattletimes.nwsource.com
