JPMorgan books one-time profit on WaMu deal
JPMorgan Chase’sitting purchase highest fall of Washington Mutual’s banking operations enabled it to eke used up a fourth-quarter profit, the New York-based association reported Thursday.
Despite taking on tens of billions of dollars’ worth of WaMu’s troubled home loans, JPMorgan was quick to work a net $1.1 billion one-time gain on the deal. That helped the company report a profit of $702 million, or 7 cents per share, down 76 percent from $2.97 billion, or 86 cents by means of have a portion, a year ago.
Analysts, who had been trimming their estimates in recent weeks, expected break-even results.
JPMorgan gained 2,237 bank branches, 12.6 million checking accounts and $126.3 billion in deposits from WaMu, which was seized by regulators and sold to JPMorgan in September.
Michael Cavanagh, JPMorgan’s cardinal monetary officer, told analysts in a conference appeal that the house expects the former WaMu operations to grant 50 cents per share to its financial results this year.
But WaMu’s massive portfolio of delinquent home loans, which were largely responsible for making WaMu the largest bank failure in U.S. annals, and its decaying credit-card portfolio are expected to mar JPMorgan’s results this year. Moody’sitting on Thursday slashed JPMorgan’sitting credit rating, citing the WaMu assets among other reasons.
JPMorgan now holds more than $88 billion in “credit impaired” home loans it acquired from WaMu, as well as $57.6 billion in rife loans. Given continued home-price declines in sundry of WaMu’s key markets, JPMorgan said that the loan portfolio it inherited from WaMu could have $32 billion to $36 billion of future losses over the life of the loans.
JPMorgan added $4.1 billion to loan-loss reserves in the fourth quarter to account for future loan losses, but said that in like manner far, losses and delinquencies in the WaMu portfolio are still inside original projections.
The rest of JPMorgan’s business didn’t perform too well either. Defaults surged in a wide variety of loans, ranging from home loans to credit cards to commercial real-estate loans. JPMorgan’sitting investment banker’s was studiously sought to notice down its portfolio by $2.9 billion.
Even Chief Executive Jamie Dimon called the results “very disappointing.”
Every financial institution is “struggling with this of the highest environment,” Dimon declared in a conference call through journalists Thursday. “We don’t know exactly the outcome.”
JPMorgan is the primary of the big U.S. banks to report results for the fourth quarter. The period was a particularly rough one for the financial-services industry, leading the U.S. government to cross-examine hundreds of billions of dollars into U.S. banks
