1. The major reason of the net income upswing of J.P. Morgan
“J.P. Morgan's profit in the second quarter was up 13%, to $5.4 billion, or $1.27 a share, compared with $4.8 billion, or $1.09 a share, in the year-ago period. Revenue increased 7%, to $27.4 billion from $25.6 billion. Both profit and revenue exceeded expectations.”
“More than half of the revenue upswing came from its investment bank, which benefited from strong gains in debt and equity underwriting. The performance puts pressure on Citigroup Inc., which reports Friday, as well as Wall Street heavyweights Goldman Sachs Group Inc. and Morgan Stanley.”
These statements are related to the performance of J.P. Morgan in the second quarter of 2011. The bank’s profit went up 13% compared with the net income of the second quarter in 2010. Its investment bank contributed more than half of the increase of the total revenue.
The graph demonstrates the net income of the five commercial banks in the second quarter of 2011 . Obviously, J.P. Morgan has the highest profit among the five banks.
The chart above shows the ratio of return on equity of J.P. Morgan and its competitors . As can be seen from the two graphs above, J.P. Morgan has not only the highest net income but also the highest ROE ratio. Thus, the bank definitely has a better performance in the sencond quarter of 2011, compared with other commertial banks.
J.P. Morgan Chase (in millions)
Q2, 2011 Q2, 2010
Net Revenue $27,410 $25,613
Provision for Credit losses 1,810 3,363
Noninterest Expense 16,842 14,631
Net Income $5,431 $4,795
The table above demonstrates the general performance of the bank in the second quarter of 2011 . As can be seen, the provision of credit losses decreased sharply from $3,3 billion to $1.8 billon, a 45% reduction. Although there was a minor growth in the noninterest expense, the rise of the revenue offsets the... [continues]
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