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