January 14, 2011 / 12:24 PM / 9 years ago

Instant View: JPMorgan quarterly earnings rise 47 percent

NEW YORK (Reuters) - JPMorgan Chase & Co reported fourth-quarter earnings jumped 47 percent compared to the year earlier quarter, helped by narrowing losses on bad loans.

The bank said fourth-quarter earnings climbed to $4.8 billion, or $1.12 a share, from $3.3 billion, or 74 cents a share, a year earlier.

JPMorgan shares were little changed in premarket electronic trading after the results were reported.

The following is reaction from industry analysts and investors:

PETER DIXON, ECONOMIST, COMMERZBANK, LONDON

“These results give us a decent benchmark for the sector as a whole. We should not be surprised if we get more outperformance. If the global economy, particularly the U.S. economy, continues to surprise on the upside, then clearly that would be a positive.

“Strong results from the banking sector in some way intensify the political pressure on banks. The more the banks earn, the more political pressure they are going to come under.”

OLIVER PURSCHE, PRESIDENT AT GARY GOLDBERG FINANCIAL SERVICES IN SUFFERN, NEW YORK

“These results make me more optimistic about what we could see out of other large banks like Citigroup, Wells Fargo and Bank of America. You can’t correlate this to what Goldman or Morgan Stanley will be like because the business lines are different.

“If you’re a long-term investor, this is a good entry point for a name like JPMorgan. The issue that banks are facing, especially JPM, Citigroup, Bank of America and Wells Fargo, is that there’s still an overhang on the mortgage issue. These stocks will be pressured because of that, though that could be offset by the prospect of higher dividends, or dividends period.”

DAVID MORRISON, MARKET STRATEGIST, GFT GLOBAL MARKETS, LONDON

“That looks pretty good on the face of it. They have come above expectations ... It doesn’t seem to be having much impact on the broader market. We have seen yet another reserve requirement ratio rise from China.”

“JPMorgan and Goldman stand on their own. Yes, they can have a knock on effect ... It doesn’t necessarily mean that we are going to see good results from the others, even the top six U.S. banks.”

CHRISTIAN TEGLLUND BLAABJERG, CHIEF EQUITY STRATEGIST, SAXO BANK, COPENHAGEN

“JPMorgan surprised massively to the upside with earnings. Sales was a major part of this earnings boost. Commercial banking, asset management and impaired loan losses were the major drivers for this significant result.”

“The continued impairment of the loan loss reserves from last quarter and the aggressive investment in new retail financial services point toward (the view) that JPMorgan believes the economic recovery is strong and sustainable and it is time for start investing again. This is good news. “

MATT MCCORMICK, PORTFOLIO MANAGER AND BANKING ANALYST, BAHL & GAYNOR:

“I would like to see these guys not keep taking from loan loss reserves. These trading revenues are ominous ... I think people in general are more optimistic about investment bank revenues going forward (than other types of banking revenues).”

“All in all, people are going to view this as a positive release, it is a positive release, but the loan-loss reserves are something that bugs me. It doesn’t matter — the Street’s going to view this as a bellwether, they’re going to view this as a positive, and most banks are going to be trading up today. ... In order to get organic earnings you have to get real revenues... I would love to see a bank hit their numbers without taking from loan-loss reserves for once.”

Reporting by Maria Aspan and Ryan Vlastelica in New York, Blaise Robinson in Paris and Dominic Lau, Atul Prakash in London in London

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