Page last updated at 16:06 GMT, Thursday, 16 April 2009 17:06 UK

JP Morgan profits beat forecasts

JP Morgan office
JP Morgan says there has been growth in its retail banking

First-quarter profits at US bank group JP Morgan Chase have come in ahead of expectations, despite falling 12.5% from a year ago to $2.1bn (£1.41bn).

The downturn and rising unemployment forced the bank to set aside more money against losses in consumer banking.

But the group's investment bank reported a profit of $1.6bn, and the forecast-beating results sent its shares up 2.6% on Wall Street.

The bank also said it could repay government aid it received in October.

JP Morgan is one of several banks to have received money from the US Treasury Department under the Troubled Asset Relief Program (Tarp).

We are confident that even a highly adverse economic scenario would not compromise our overall strength and stability
Jamie Dimon, JP Morgan Chase chief executive

It received $25bn in taxpayer funds from the US government in October last year, but JP Morgan chief executive Jamie Dimon said the bank had the money to repay.

"We could pay it back tomorrow," said Mr Dimon, who added that the bank was waiting for guidance from the government on when it could do so.

Earlier this week, Goldman Sachs raised $5bn in a stock sale to help pay back the $10bn it received from the government.

'Record revenue'

JP Morgan - which last year bought Bear Sterns and acquired most of the assets of failed lender Washington Mutual - is the latest US bank to report better-than-expected figures.

In the past week, Goldman Sachs has reported profits ahead of forecasts and Wells Fargo has said it expects record net profits for the first-quarter.

Mr Dimon said: "We generated record firm-wide revenue; record revenue and net income in the investment bank; and benefited from underlying growth in retail banking."

Group-wide revenue rose to $26.9bn in the first three months of the year, up from $17.9bn in the same period a year earlier.

Net profit at its investment banking division came in at $1.6bn, compared with a loss of $87m in the first quarter of 2008.

Its retail financial services unit also recorded a profit of $474m, compared with a loss of $311m for the same period a year ago. The bank said this was largely as a result of the "positive impact" of the Washington Mutual acquisition.

However, it reported a loss of $547m in card services, driven by a "higher provision for credit losses". The division made a $609m profit for the same quarter a year ago.

"We are maintaining our efforts to help the economy recover. We continue to lend and have extended approximately $150bn in new credit to consumer and corporate customers during the first quarter," Mr Dimon said.

Looking ahead to the rest of 2009, Mr Dimon said: "We are confident that even a highly adverse economic scenario would not compromise our overall strength and stability."

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