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April 11, 2014

JPMorgan Earnings Fall 18.5% on Slowdown in Trading and Mortgage Lending

“JPMorgan Chase reported an 18.5 percent slump in first-quarter earnings on Friday, as the nation’s largest bank grappled with dual challenges: sluggish revenue from trading and lackluster mortgage lending.”

“Both issues, broadly buffeting the banking industry, damped profits at JPMorgan.”

“The net earnings of $5.27 billion, or $1.28 a share, came in slightly below Wall Street analysts’ expectations of $1.40 a share on revenue of $24.53 billion.”

“Revenue dropped to $23.86 billion. The bank’s stock dropped when the market opened on Friday morning, falling more than 4 percent.”

“As the nation’s largest bank, JPMorgan has become a kind of bellwether for the broader industry. The lukewarm results on Friday underscored how Wall Street has struggled to recoup the revenue drained from a slowdown in trading. Compounding the problem, revenue from underwriting bonds has also dipped in recent quarters.”

“At an investor conference in February, JPMorgan executives foreshadowed the slowdown, predicting that revenue from trading would fall by roughly 15 percent from just a year earlier. And ahead of the earnings, some bank analysts said they expected the trading woes to be aggravated as the nation’s biggest banks adapt to new rules on derivative trading.”

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Read full New York Times article here.

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