Write-downs hit JP Morgan profit

The firm snapped up Bear Stearns as its rival floundered

JP Morgan Chase, the third-largest US bank, saw its second-quarter profit fall 52%, as it suffered $1.1bn (£550m) in mortgage-related write-downs.

Net income at the investment bank fell to $2bn from $4.23bn a year earlier.

The New York-based company, which bought struggling Bear Stearns in May, has survived the credit crunch better than its peers.

Costs of the takeover also hit profits, which came in slightly stronger than analysts had expected.

JP Morgan bought rival Bear Stearns following its near-collapse as clients lost confidence and withdrew funds.

Bear Stearns got into trouble when other banks refused to lend it money because of fears that it had too much exposure to US mortgage debt.

Before Thursday's results, JP Morgan had posted more than $9bn in write-downs and losses related to the sub-prime crisis.

But analyst David Buik of BGC Partners in London said: "JP Morgan has certainly got the best track record in the last year.

"They seem to be less involved in sub-prime lending and mortgage-backed securities than any of their peers."