JPMorgan net falls 50 percent

By Jonathan Stempel and Joseph A. Giannone

NEW YORK (Reuters) - JPMorgan Chase & Co (JPM.N), said on Wednesday quarterly profit fell 50 percent, but the third-largest U.S. bank was able to skirt the massive losses that have crippled many rivals, and its shares rose as much as 5 percent.

The bank set aside $4.42 billion for loan losses, and took about $2.6 billion of write-downs tied to mortgages, loans to fund corporate buyouts, and tight credit markets. Nevertheless, its problems paled compared to those at Citigroup Inc (C.N), UBS AG (UBSN.VX) and Merrill Lynch & Co MER.N.

"Overall, we feel pretty good about where we are," JPMorgan Chief Executive Jamie Dimon said on a conference call with analysts.

Net income in the first quarter fell to $2.37 billion, or 68 cents per share, from $4.79 billion, or $1.34, a year earlier. Profit included a $955 million gain from a stake in credit card network Visa Inc (V.N), which went public last month.

Profit topped the average analyst forecast of 64 cents per share according to Thomson First Call, which excluded the Visa gain. Reuters Estimates, which included Visa, said the average estimate was 71 cents.

Net revenue fell 11 percent to $16.89 billion, meeting expectations.

"JPMorgan did relatively well in a very difficult operating environment," Sandler O'Neill analyst Jeff Harte said.

Citigroup, the largest U.S. bank, may post a quarterly loss close to $5 billion on Friday, analysts on average expect.

In morning trading, the bank's shares were up $1.97, or 4.7 percent, at $44.09 on the New York Stock Exchange.

BEAR STEARNS

JPMorgan said the $4.42 billion set aside for loan losses was more than quadruple the $979 million set aside a year earlier. Net charge-offs more than doubled to $1.91 billion. JPMorgan's total allowance for credit losses rose $2.52 billion from the end of 2007 to $12.6 billion.

The bank's write-downs, meanwhile, included about $1.2 billion for mortgages, $1.1 billion for leveraged loans, and $266 million tied to collateralized debt obligations.

JPMorgan remains on track to complete its purchase of the Bear Stearns Cos BSC.N this quarter. It agreed to buy the troubled investment bank last month for $10 per share.

On Tuesday, JPMorgan said it had boosted its stake in Bear to 49.8 percent, all but guaranteeing shareholder approval.

Though Bear's business deteriorated significantly in the last month, JPMorgan Chief Financial Officer Mike Cavanagh told reporters that Bear's financial performance is tracking "basically the way we expected initially."