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JPM Misses Q4 Revenue, EPS In Line, DVA Loss Of $567 MM, Big Drop In Investment Banking
If JPM, which just launched the financials earnings onslaught by first reporting Q4 results, is any indication, it will not be pretty for the financial sector which has seen dramatic moves higher in the past several weeks, because as Jamie Dimon says, Q4 was "Modestly Disappointing." The reason: a top line miss, and a continuing contraction in capital markets leading to yet another decline in Investment Banking results. Also, what DVA giveth, DVA taketh away, and with CDS tightening in the quarter, DVA resulted in a $567 million loss in the quarter. Yet even with the DVA impact exclusion, revenue, which was reported at $21.47 billion would still have missed estimates of $22.56 billion. Finally, what would a quarter be if a bank did not reduce its loan loss allowance and release even more reserves, no matter how the market is actually doing: JPM did just that in its mortgage banking division, lowering its net loan loss allowance by $230 million following a $1 billion allowance reduction in loan-losses offset by actual impairments of $770 million. Stock is down following the release.
Among the highlights:
- Basel I Tier 1 common of $123 billion, ratio at 10%; Basel III Tier 1 at 7.9%
- Loan loss coverage ratio at 3.35% of total loans
- Investment Bank revenue: $4.4 billion, down $2 billion from Q3, and down $1.9 billion from a year prior
- Of which Fixed Income market revenue down $645 million to $779 sequentially, $349 Y/Y
- $2.9 billion in charge offs in Q4, down 43% compared to prior year
“The Firm’s returns on tangible common equity for the fourth quarter of 2011 and the full year 2011 were 11% and 15%, respectively. We believe these returns were reasonable given the environment, although the return for the fourth quarter was modestly disappointing. Several significant items affected the Firm’s fourth-quarter results, including a $567 million pretax DVA loss which reflected the tightening of the Firm’s credit spreads. As we have consistently said, whether positive or negative, we do not consider DVA reflective of the underlying operations of the company.”
“We were pleased that the Investment Bank continued to rank #1 in Global Investment Banking Fees for 2011. Consumer & Business Banking opened 260 new branches and increased deposits by 8% in 2011. In our Card business, credit card sales volume2 was up 10% for 2011. Treasury & Securities Services reported record deposits2, up 28% for 2011. Commercial Banking reported record deposit2 balances, up 26%, and record net income for 2011.”
Dimon added: “As the economy continues to recover, we are gratified to see signs of improvement in loan demand and credit quality. Commercial Banking had its sixth consecutive quarter of loan growth, including a 17% increase in middle-market loans over the prior year. In Treasury & Securities Services, trade loans were up 73% over the prior year. Business Banking loans were up 5% over the prior year reflecting a 24% increase in origination volume during 2011. Mortgage originations through the Firm’s retail channel were strong. Finally, the Card business had continued loan growth in the fourth quarter as the Chase credit card portfolio1 ended the year with outstandings of $120.0 billion.”
“Firmwide, net charge-offs were $2.9 billion in the fourth quarter, down 43% compared with the prior year, and nonperforming assets declined by 33%. Mortgage net charge-offs and delinquencies modestly improved, but both remained at elevated levels. With respect to our credit card portfolio, the net charge-off rate1 improved to 3.93%, down from 4.34% in the prior quarter and 7.08% in the prior year. Wholesale credit performance remained stable.”
Commenting on the balance sheet, Dimon said “We maintained our fortress balance sheet, ending the year with a strong Basel I Tier 1 Common1 ratio of 10.0%. Our capital position allowed us to repurchase $9 billion of common stock2 during 2011, including $950 million during the fourth quarter. We estimate that our Basel III Tier 1 Common1 ratio was approximately 7.9% at the end of the fourth quarter. Our total firmwide credit reserves were $28.3 billion, resulting in a firmwide coverage ratio of 3.35% of total loans1. The Firm’s total deposits increased to $1.1 trillion, up 21% compared with the prior year.”
Dimon concluded: “I am proud of the work our 260,000 employees have done this past year to continue the Firm's 200-year tradition of showing leadership and responsibility during challenging times. JPMorgan Chase has a positive impact on the lives of millions of people and the communities in which they live. All of the Firm’s accomplishments and our success in the future rest on a foundation of capital strength and careful stewardship of the Firm through this challenging economy and a new, complex regulatory environment. We are working hard to help our clients thrive, economies grow and communities prosper.”
JPM's Investment banking summary results:
Full earnings presentation
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a swing and a miss
How the SHIT does a bank miss fake earnings??
They obviously don't want the market going up much more.
These financial earnings are fake
The FED and the Boys "on the take"
If they can make good
A "Reverse Robin Hood"
More bonuses Banksters can make
Jamie is the Fed... as JPM is a major share holder in the FRBNY...
The Bernank is just a bald, cue ball, bumbling front man with a beard...
Like Corzine...
Is that the same 'Modestly disappointing' as the 3500 jobs going at RBS in the UK? Twat.
DVA loss is caused by the prior gain. Yay my super-advanced ridiculous accounting class that I survived last semester. GO BLUE!!!
Here we come QE, here we come...clap....clap...clap...
Pleased to here this, hope those MF's go under! I would be willing to bet that the majority of what they did make was on naked shorting of meatals for the crime circus?
Woulda been $ 1.2 billion worse if they hadn't stolen the customer funds from MF Global.
I am not going to read it because I could never invest in a bank....but I wonder if there is a foot note on how much exposure they have to MF Global...or are they using the "I don´t know what happened to the money" excuse????? and the accountants signing off on it
Just did a quick search in the SEC filings for "MF" and came up with nothing.
What a shorting opportunity the recent run up on the JPM share price had created, I presume the price will slide from here.
"We are working hard to help our clients thrive, economies grow and communities prosper." - Jamie Dimon
I don't see it..
He didn't specify which clients, economies, and communities, so let me clarify...
"clients": a select few priveledged.
"economies": micro, not macro (read: the .01%)
"communities": The Hamptons, select Connecticut and NJ suburbs within Wall Street commuting (i.e.-private limo) area.
They should have stole more money from MF Global customers.
JPMorgan Chase has a positive impact on the lives of millions of people and the communities in which they live.
Fuckin' LOL
JPM, the king of the worldwide lamprey banking system, beating their breast about their contributions to community.
What's next, commercials of JPM staffers rescuing kittens from trees.
JPM knows people despise them. Check out the bullet proof windows between you and the teller.
Hey! There're doing everything thing they can for petes sake. Why, just Dec. 14th They(and Blackrock) met with Romney to advance their position within the White House versus Goldman Sachs. JPM is 'competeing' just as hard as they can!!!(Sarc)
all that matters: the bonus pool was not effected.
Jamie whines about the "complex regulatory environment." Why not simplify the issue and re-enact Glass-Steagal?
I'd post the picture if I could; this deserves to be revisited:
http://www.zerohedge.com/contributed/obamney-bull-new-old-thang
Yes, Mr. "Truth" Jamie Dimon is the head of the shaft.
One of the butt heads on CNBC Sirius radio yesterday said Bank of America was looking at new advertising slogans. Did anybody else hear that? Boy, that could be fun. Bet they might like a few from ZH. I like "Look Spot, see bank run"
Anybody else wondering how their copper position is doing? no mention of it that I can see, likewise for Silver.
Dimon added: “As the economy continues to recover, we are gratified to see bla bla bla" I found it hard to read past this assertion of continuous recovery. Just wishful spin for the sheeple.
Until there is proper enforcable mark to market regulation, bank ballance sheets will continue to be misleading to the extent of appearing fraudulent. Only worth reading for entertainment.
Misleading to the extent of appearing fraudulent. Appearing fraudulent? Appearing? No, they ARE fraudulent. These banks exist today only because we bailed them out, and then they paid themselves bonuses with our taxpayer money. How's that for appearances?
Oh, and let's not forget the reduction in loan loss reserves, because everything is fine now, right?
I'm glad to see that more than one JPM employee has decided to join me in $FAZ.
it's great to be a mega banker these days..soon they will own all of the RE in America and most of the world. and doing it with fiat given at o.o%
how do you calculate PE when you get FRN's at 0%? much too complex for average americans to understand. fake 10q's to hide the fact that they will soon own everything. how many farms will JPM pick up after MF global stole all the money in futures acc's there?
genius true evil genius.
How many trillion of derivitives do they have...have they sold.....have positions on...are liable for.....????? I think we are about to see as Greece goes down....but then again...when you are in the back pockets of the Central bankers....anything can happen.....and I think they will print print print...banks make money on a %....the more pieces of paper out there....the more banks can "make"...
Look at the scaling factors of the vertical axis on their charts. Next quarter it will be just half an inch high so it still looks at least flat.
Good thing they ripped off MFGlobal or this could have been much worse.
Jamie:
Next time you are a billion short, please ask first before you simply steal it. For God's sake, at least kiss me first.
FU and Y,
an angry elf
JPM revenue from Equity Markets was lowest since Lehman collapse: that's what happens when SkyNet takes over and nobody trades. So we really did have our Lehman 2.0 moment as evident from the swaps chart they were just able to hide it for a little while longer.Here is the FUBAR excerpt of the day from the FUBAR article of the day:
Excerpt: "The earnings show how well JPMorgan can be managed in one of the roughest times," said money manager Michael Holland, founder of Holland & Co. "They were able to pull off a meet-or-beat quarter."
Article: http://finance.yahoo.com/q/ae?s=JPM+Analyst+Estimates
Reality: JPM's EPS projections were lowered from $1.11 per share down to $0.90 per share over the past 90 days. It isn't too hard to pull off a "meet-or-beat quarter" when you lower the goddam bar over and over.
http://finance.yahoo.com/q/ae?s=JPM+Analyst+Estimates
Gee, it must be nice for the whoremongers to peddle this same load of BS over and over and still have people believe it.
If it wasn't for the ONLY economic policy of the Wall Street puppet Obama Bin Lyin' NBLB...
"No Bankster Left Behind"...
Gimme a Shine, Jamie
The preeminent corporate, TBTF welfare ho Jamie Dimon would be shinning shoes for a living...