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JPMorgan profit sinks as credit deteriorates
Staff and agencies
By MADLEN READ, AP Business Writer 19 minutes ago
NEW YORK - JPMorgan Chase & Co.‘s profit tumbled 84 percent in the third quarter after it took big hits from souring mortgage investments, leveraged loans and home loans.
Analysts polled by Thomson Reuters had predicted a loss of 21 cents per share.
JPMorgan‘s investment bank wrote down $3.6 billion from its mortgage investments and leveraged lending exposures, and boosted loan loss reserves by $1.3 billion to $15.3 billion.
WaMu — the largest bank to fail in U.S. history — was sold by the Federal Deposit Insurance Corp. to JPMorgan for $1.9 billion late last month. It was JPMorgan‘s second major acquisition during the credit crisis that has escalated over the past year; in March, JPMorgan bought the ailing investment bank Bear Stearns Cos. in another deal brokered by the government.
The bank‘s markdowns and losses were partially offset by double-digit net income growth in the bank‘s commercial banking and Treasury and securities services businesses. The company also raised $11.5 billion through stock sales during the quarter, and benefited by $927 million, after-tax, from reduced deferred tax liabilities.
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