JP Morgan Key Results And Outlook
JP Morgan earlier reported better than expected earnings on weaker than expected results. While the 9 am conference call will provide additional data, here are the key data points from the provided slide deck.
- Tier 1 Capital ratio increases by 0.9% sequentially to 11.1%; $133 billion Tier 1 capital on $1.2 trillion in risk-weighted assets (a decline of $40 billion from prior quarter, while total assets declined by only $10 billion).
- Total firmwide credit reserves of $32.5 billion, loan loss at 5.51%
- JPM estimates impact of FAS 166/167 on Tier 1 of 40 bps.
- More aggressive loan reserving compared to peers
- Loan-loss reserves/NPLs drops to 180%
- Outlook is cautious: "If economy weakens further, additional reserving actions may be required"
- Chase losses could approach 11% by 1Q10 including the adverse timing effect of payment holiday of approximately 60bps
- WaMu losses could approach 24% +/- over the next several quarters
- Anticipate net income reduction from legislative changes of $500-$750mm; CDS clearinghouse transition seems like should cost JPM more.
- Credit environment remains uncertain: Signs of stability ≠ improvement
JPM earnings webcast begins at 9 am.