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New York (AFP) – JPMorgan Chase Friday reported lower earnings due to a drop in its mortgage business as the U.S. banking giant seeks to turn the corner after costly legal settlements.

JPMorgan, one of the first major companies to release first-quarter results, said net income was $5.3 billion, down 19 percent from a year ago.

Key factors behind the decline included a big drop in mortgage banking income, lower earnings from corporate and investment banking and a rise in provisions in case of credit losses.

JPMorgan chief executive Jamie Dimon said the results were “good” given the industry-wide headwinds in trading and mortgages.

“We have growing confidence in the economy — consumers, corporations and middle market companies are in increasingly good financial shape and housing has turned the corner in most markets — and we are doing our part to support the recovery,” Dimon said.

The results follow a 2013 marred by huge legal settlements over JPMorgan’s mortgage practices prior to the 2008 crisis, a major trading scandal in the bank’s London office and other controversies.

Dimon called the conditions of 2013 “painful and nerve-wracking” in a letter to shareholders this week. However, bank officials are hopeful 2014 will see fewer large legal settlements with regulators and private parties.

Net income in mortgage banking was $114 million, down $559 million from last year. Profits in corporate and investment banking were $2.0 billion, down from $2.6 billion in the 2013 quarter.

The company’s provision for credit losses was $850 million, up $233 million from last year.

The earnings translated into $1.28 per share, below the $1.40 expected by Wall Street. Revenues came in at $23.86 billion, below the $24.53 billion projected by analysts.

Shares of JPMorgan fell 2.7 percent to $55.87 in pre-market trading.

AFP Photo/Robyn Beck

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Danziger Draws

Jeff Danziger lives in New York City. He is represented by CWS Syndicate and the Washington Post Writers Group. He is the recipient of the Herblock Prize and the Thomas Nast (Landau) Prize. He served in the US Army in Vietnam and was awarded the Bronze Star and the Air Medal. He has published eleven books of cartoons and one novel. Visit him at DanzigerCartoons.

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