JP Morgan Chase reports 4% drop in Q3 earnings

The chase is on.

JP Morgan Chase saw its Q3 earnings fall by 4% as the European debt crisis kept investment banking clients on the sidelines. Earnings came in at $1.02 per share on revenue of $24.37 billion while analysts were looking for $0.91 on $23.4 billion. However, the bottom line was helped by a $1.9 billion adjustment for the market value of the bank’s debt. Banks are able to record an accounting gain when their debt weakens relative to U.S. Treasuries. Investment banking fees fell 31% to $1 billion, while revenue from stock and bond trading was down 14% if you exclude the accounting gain.

CEO Jamie Dimon said on a conference call that he felt consumers and businesses were not being overly cautious, pointing to an increase in small business loans and increased spending by consumers. He said, “It looks like the recovery is still here folks. It hasn’t really strengthened, but it’s still here.”

JP Morgan was the first big U.S. bank to report its results, and is typically seen as a barometer for other banks. On the back of the results, shares of Goldman Sachs (GS), Citigroup (C), Morgan Stanley (MS) and Bank of America (BAC) all traded lower.

JP Morgan (JPM : NYSE : US$31.60), Net Change: -1.60, % Change: -4.82%, Volume: 77,867,211

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx

About the Author

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx.

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