Private Banking, Wealth Revenues Drop At JP Morgan

Tom Burroughes Editor London 17 July 2009


JP Morgan said its private bank revenues fell by 10 per cent or $640 million in the second quarter of this year from the same period a year ago, while private wealth management revenues slipped by 6 per cent to $334 million from weaker markets, the Wall Street banking giant said.

Within the private banking segment, the firm said institutional revenue rose by 3 per cent to $487 million due to higher valuations of seed capital investments, largely offset by the effect of lower market levels. Meanwhile, retail revenue in this segment fell by 16 per cent to $411 million due to the effect of lower market levels and net equity outflows, partially offset by higher valuations of seed capital investments.

Across the banking group as a whole, JPMorgan reported second-quarter 2009 net income of $2.7 billion, which is an increase of 36 per cent compared with net income of $2.0 billion in the second quarter of 2008.

"Even after further strengthening our credit reserves by $2 billion to $30 billion and repaying the $25 billion of TARP [US Troubled Asset Relief Programme] capital, the firm ended the quarter with a very strong Tier 1 Capital ratio of 9.7 per cent and a Tier 1 Common ratio of 7.7 per cent. With these additions to reserves, we now have an extremely high loan loss coverage ratio of 5 per cent,” said Jamie Dimon, chief executive and chairman.

For the group, net revenue was $7.3 billion, an increase of $1.8 billion from the prior year. Investment banking fees were up 29 per cent to a record $2.2 billion.

Within asset management, net income was $352 million, a decrease of $43 million, or 11 per cent from the same three-month period a year ago, due to lower net revenue and higher provision for credit losses offset partially by lower non-interest expense.

Assets under supervision were $1.5 trillion, a decrease of $68 billion, or 4 per cent, from the prior year. Assets under management were $1.2 trillion, a decrease of $14 billion, or 1 per cent, from the year before.

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes