By Simon Miller
JP Morgan's investment arm saw a 29% Q1 loss on net income compared with Q1 2011 according to its latest results.
Net income was $1.7bn, compared with $8.2bn in the prior year which JP Morgan Chase said reflected lower net revenue and a lower benefit from the provision for credit losses, partially offset by lower noninterest expense.
Investment banking fees were $1.4bn (down 23%), which consists of debt underwriting fees of $818m (down 16%), equity underwriting fees of $276m(down 27%), and advisory fees of $281m (down 34%). Combined Fixed Income and Equity Markets revenue was $6.0bn, down 10% from the prior year. Credit Portfolio reported a loss of $12m.
Net revenue included a $907m loss from DVA on certain structured and derivative liabilities resulting from the tightening of the Firm's credit spreads; this loss was composed of $352m in Fixed Income Markets, $130m in Equity Markets and $425m in Credit Portfolio. Excluding the impact of DVA, net revenue was $8.2bn and net income was $2.2bn.
The company reported first-quarter 2012 net income of $5.4bn, compared with net income of $5.6bn in the first quarter of 2011. Earnings per share were $1.31, compared with $1.28 in the first quarter of 2011.
Jamie Dimon, chairman and CEO, commented: "While several significant items affected our results, overall, the Firm's performance in the first quarter was solid. The Firm's return on tangible common equity1 for the first quarter of 2012 was 16%, compared with 11% in the prior quarter and 18% in the prior year."