JPMorgan profits boost confidence in Wall Street

America's biggest bank JPMorgan Chase today reported better-than-expected first-quarter profits, making it the third US bank to cheer Wall Street in a week.

Chief executive Jamie Dimon, who oversaw the government-backed, rescue takeovers of Bear Stearns and Washington Mutual last year, said: "We are confident that even a highly adverse economic scenario would not compromise our overall strength and stability. We remain well-positioned to benefit when the economy recovers."

As the US economy falls further into recession and unemployment rises, the bank, which is both a massive consumer bank and an investment bank, was forced to hike its bad-debt provisions. But these were all largely due to worsening credit card payments and people falling behind on loans and mortgages rather than to the toxic asset writedowns which have hit so many of its rivals.

JPMorgan received $25 billion (£16.8 billion) as part of the US government Troubled Assets Relief Programme but Dimon, like his rivals at Goldman Sachs, is keen to pay this back quickly. Earlier this month, he tried to hand US Treasury Secretary Timothy Geithner a mocked-up cheque for that amount during a meeting between President Obama and top bankers. Geithner refused the gesture.

Today Dimon said: "The firm earned more than $2 billion this quarter despite credit costs of $10 billion. Importantly we generated record firmwide revenue: record revenues and net income in the investment bank, underlying growth in retail banking and excellent progress on the Washington Mutual integration."

JPMorgan's net income was $2.14 billion in the three months to end-March. That was up from just $702 million in the final quarter but down from the $2.37 earned in the first quarter of 2008. Earnings per share were 40 cents — well ahead of Wall Street analysts' forecasts of 32 cents.

The $10 billion set aside against bad loans and credit losses was double the amount provided at the same time last year. The bank has cut more than 5000 jobs in the last three months.

Dimon said JPMorgan was doing its bit to help the US economy and responding well to President Obama's plea to hold back on home repossessions.

He said: "We continue to lend and have extended approximately $150 billion to consumer and corporate customers during the first quarter. We continued working towards our goal of preventing 650,000 [repossessions] by the end of next year to help people keep their homes.

"Throughout this crisis, we have remained committed to help bring stability to the communities in which we operate and the financial system overall."