JPMorgan Chase has seen its Q1 income plummet 50% to $2.4bn after reporting another substantial bad credit write-off.
America’s third largest bank saw income fall from a record $4.8bn in Q1 last year, mainly attributed to a $2.6bn write-down in sub-prime related credit.
The latest write-down follows the bank's $1.3bn sub-prime hit in Q4 2007.
“Our earnings this quarter were down significantly as market conditions and the credit environment remained challenging,” chairman and CEO Jamie Dimon says.
“However, the firm as a whole maintained solid business momentum and our capital position remained strong.”
Dimon remains confident the recent agreement to acquire Bear Stearns will add value to the enlarged company, but is somewhat bearish on the short-term economic landscape.
“Our expectation is for the economic environment to continue to be weak and for the capital markets to remain under stress,” he says.
“These factors have affected, and are likely to continue to negatively impact, our firm’s credit losses, overall business volumes and earnings – possibly through the remainder of the year, or longer.
“However, we are prepared to manage through this down part of the economic cycle, given the strength of our liquidity, credit reserves, capital and operating margins, and to successfully position our company well for the future.”
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