January 15, 2009 - 10:12am
JPMorgan Chase & Co. released its fourth quarter 2008 report that shows the company had a net income of $702 million, compared with net income of $3.0 billion in the fourth quarter of 2007. Earnings per share made up $0.07 against $0.86 in the fourth quarter last year. For the full year of 2008 net income amounted $5.6 billion, or $1.37 per share, a 64% decrease from $15.4 billion, or $4.38 per share in 2007.
Jamie Dimon, Chairman and Chief Executive Officer, commented: “Our fourth-quarter financial results were very disappointing, driven by a loss in investment Banking largely attributable to continued markdowns on leveraged loans and mortgage trading positions, as well as weak trading results. We also faced higher credit costs associated with continued deterioration across our loan portfolios, including a $4.1 billion addition to loan loss reserves. However, we continued to see underlying growth in many business areas. The integration of our recently-acquired Washington Mutual franchise has progressed well, and we continued to grow in Treasury & Securities Services and Commercial Banking. We also opened millions of new checking and credit card accounts, experienced net inflows in assets under management, and gained Investment Banking market share in all major fee categories.”
In addition the company reported a Tier 1 capital ratio of 10.8% (estimated) as of December 31, 2008. The total allowance for loan losses increased to $23.2 billion which resulted in a firmwide coverage ratio of 3.16%4. Dimon noted that though the company diversified the nature of their franchise and strong capital position have enabled JPMorgan Chase to weather the recessionary environment the company still added $13.9 billion to their allowance for loan losses in 2008 to keep this important component of their fortress balance sheet firmly intact.
Looking ahead to 2009, Jamie Dimon added: “If the economic environment deteriorates further, which is a distinct possibility, it is reasonable to expect additional negative impact on our market-related businesses, continued higher loan losses and increases to our credit reserves.”
Jamie Dimon, Chairman and Chief Executive Officer, commented: “Our fourth-quarter financial results were very disappointing, driven by a loss in investment Banking largely attributable to continued markdowns on leveraged loans and mortgage trading positions, as well as weak trading results. We also faced higher credit costs associated with continued deterioration across our loan portfolios, including a $4.1 billion addition to loan loss reserves. However, we continued to see underlying growth in many business areas. The integration of our recently-acquired Washington Mutual franchise has progressed well, and we continued to grow in Treasury & Securities Services and Commercial Banking. We also opened millions of new checking and credit card accounts, experienced net inflows in assets under management, and gained Investment Banking market share in all major fee categories.”
In addition the company reported a Tier 1 capital ratio of 10.8% (estimated) as of December 31, 2008. The total allowance for loan losses increased to $23.2 billion which resulted in a firmwide coverage ratio of 3.16%4. Dimon noted that though the company diversified the nature of their franchise and strong capital position have enabled JPMorgan Chase to weather the recessionary environment the company still added $13.9 billion to their allowance for loan losses in 2008 to keep this important component of their fortress balance sheet firmly intact.
Looking ahead to 2009, Jamie Dimon added: “If the economic environment deteriorates further, which is a distinct possibility, it is reasonable to expect additional negative impact on our market-related businesses, continued higher loan losses and increases to our credit reserves.”