JPMorgan's first quarter earnings fall by 19% on lower mortgage income

Friday 11 April 2014 18.03
JPMorgan chief executive Jamie Dimon said Q1 results were 'good'
JPMorgan chief executive Jamie Dimon said Q1 results were 'good'

JPMorgan Chase has reported lower earnings due to a drop in its mortgage business as the US banking giant seeks to turn the corner after costly legal settlements.

JPMorgan, one of the first major US companies to release first-quarter results, said net income was $5.3 billion, down 19% 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 year 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 $114m, down $559m from last year. Profits in corporate and investment banking were $2 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.