JP Morgan reports $2.7 billion Q2 net income on record revenue of $27.7 billion

JPMorgan Chase & Co today reported second-quarter 2009 net income of $2.7 billion, an increase of 36 per cent compared with net income of $2.0 billion in the second quarter of 2008. The Wall Street investment bank also reported record revenue of $27.7 billion in the June 2009 quarter.

Earnings per share were $0.28, compared with $0.53 in the second quarter of 2008, reflecting a one-time, non-cash reduction in net income applicable to common stockholders of $1.1 billion, or $0.27 per share, resulting from repayment of TARP preferred capital, the bank said in a release.

Net income was $1.5 billion, an increase of $1.1 billion from the prior year. The results reflected higher net revenue and lower non-interest expense, partially offset by a higher provision for credit losses.

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 and comprised the following: advisory fees, up 6 per cent to $393 million; equity underwriting fees, up by $561 million to a record $1.1 billion; and debt underwriting fees, down 10 per cent to $743 million. Fixed income markets revenue was a record $4.9 billion, up $2.6 billion from the prior year, driven by strong results across all products, as well as the absence of markdowns related to leveraged lending funded and unfunded commitments and mortgage-related exposure.

The bank said its fixed income markets revenue was offset partially by losses of $773 million from the tightening of the firm's credit spread on certain structured liabilities. Equity markets revenue was down $371 million, or 34 per cent, at $708 million, reflecting weak trading results and losses of $326 million from the tightening of the firm's credit spread on certain structured liabilities, offset by strong client revenue, particularly in prime services.

Credit portfolio registered a loss of $575 million, down $914 million, reflecting mark-to-market losses on hedges of retained loans, partially offset by the net impact of credit
spreads on derivative assets and liabilities and net interest income on loans.