JPMorgan Profit Falls 19% on Lower Mortgage Revenue

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

April 11 (Bloomberg) -- Bloomberg’s Scarlet Fu reports on first-quarter results from JPMorgan Chase with Christopher Whalen, author of “Inflated,” on Bloomberg Television’s “Bloomberg Surveillance.”

Optimism.

Wei du jamie -- we knew jamie dimon would be excited.

Jpmorgan is reporting revenue of $23 billion, down eight percent from a year ago.

That is a big mess.

That goes to the bottom line as well.

Earning share of one dollar -- $1.28. if these are the right numbers, that would be amiss as well.

You mentioned the dividend increase that is part of the headlines i am seeing, his comments about the letter to shareholders earlier this week about this being a very difficult year and dedicating effort to adapt to the new global financial architecture.

Our guest host for the hour is a global architectt.

Isn't it built to withstand these different changing architectures?

No, you take in the revenue opportunity away from jpmorgan.

We'll told the big banks that they can't deploy capital for their own account anymore, which limits liquidity in the market.

The business model is changing.

Elicit the business is changing.

Revenue is down 10%, year-over-year.

Spread compression is another problem.

You are having the tough time making the margin.

More competition for a limited number of customers.

The banks are only writing prime loans.

They don't want to have too touch of loan that has a chance of defaulting.

Spreads are definitely coming in.

Provision expenses is something worth highlighting.

800 $50 million in the first quarter when analysts were looking for $700 million.

That is bigger than than the same time last year.

What does that say about the credit quality that up until this point had been improving?

You are probably going to see charge-offs and credit cards costs go up.

It is still high by just work of standards.

Before the crisis, you did not see the full christ of the fault.

Categories like housing were subsidized.

People could refinance their home.

They had access to cash.

Now you see the real cost of the fault in these numbers.

You will see the price go up a little bit.

I want to give you a victory lap.

You have been way out front on the underperformance of the banks.

Is this a one-off quarter or one off two quarters?

Is there a chronic nature to the underperformance of our too big to fail banks?

They are utilities now.

They don't have as much opportunity with off-balance-sheet finance.

Other areas that they used to have have been taken off the table.

Why is jpmorgan upping its dividend in light of problems in the business?

They are giving more cash to investors to stabilize the stock price.

They are fairly valued.

The real problem is something like wells fargo, which is even more dependent.

They will be announcing at 8:00 this morning.

Are the worst that -- worth that kind of premium?

I don't think so.

They are the best performers in the group.

They should be valued at more closely.

People are in wells because they want to be there.

I want to jump in here.

We have some trading revenue numbers.

Jpmorgan said it would post a 15% drop.

It appears that revenue for this quarter missed by 18% very and it is larger than they had anticipated.

It is hard to predict that.

It is a tough environment trading in general.

That is the one part of a bank that analysts have no chance to predict.

It is a black box.

It is based on all of these idiosyncratic factor.

You can look at housing and telephone is going up or down.

Trading is a quarter by quarter thing.

Equity trading has beat analyst estimates.

Analysts were looking at the neighborhood of $1.25 billion.

That is a silver lining.

Daegis a much are giving us that analysis.

Thank you so much.

We are going to send it back over to tom in the meantime.

We love having chris whalen on.

It is the latest in palace intrigue.

Kathleen sibelius is falling on her sword.

King barack is excepting her recognition -- resignation.

Julianna goldman broke the story

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change