J.P. Morgan Chase & Co, which last
week agreed to buy Bank One Corp. for $55 billion, had a $1.86
billion fourth-quarter profit, after recording a loss in the year-ago quarter, amid gains in securities underwriting and a drop in
bad loans.
Net income was 89 cents a share, compared with a net loss of
$387 million, or 20 cents, according to a statement on Business
Wire. The average forecast of 13 analysts in a Thomson Financial
survey was 77 cents.
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The purchase by J.P. Morgan Chief Executive Officer William
Harrison will form a company to rival Citigroup Inc. by selling
everything from insurance for individuals to interest rate swaps
for the biggest corporations. With $1.08 trillion of assets, the
combined bank will be the world’s biggest corporate lender and
the largest U.S. credit-card issuer.
“He’s accomplished what he’s set out to do,” said Kevin
McCloskey, who helps manage about $200 billion at Federated
Investors Inc. in Pittsburgh. “But the jury is still out on
whether he’s been successful.”
Net revenue at the second-largest bank by assets was up 21
percent to $7.93 billion. That missed the $7.99 billion forecast
by the analysts in Thomson Financial’s survey. Revenue linked to
trading rose 1 percent to $1.27 billion.
Investment banking profit more than doubled to $860 million
as underwriting fees increased 28 percent to $834 million and bad
loan losses fell $730 million. The unit cut personnel costs 21
percent to $836 million while revenue fell 8 percent to $3.04
billion.
While J.P. Morgan shares climbed 53 percent in 2003, they
dropped the three previous years amid an increase in bad loans
and losses in venture capital. The bank’s private-equity unit
earned $22 million in the fourth quarter, its second quarter of
profit since the 2000 merger of J.P. Morgan & Co. and Chase
Manhattan Corp.
Bloomberg News
