JP Morgan Chase earning blow

JP MORGAN CHASE, America's second-largest banking company, today reported second-quarter operating earnings stronger than those delivered a year ago but well below analysts' expectations.

Earnings were 58 cents a share or $1.18bn (£750m) against 38 cents in the second quarter of 2001. Analysts had projected profits of 65 cents a share for the global giant, which has denied recent rumours that it is suffering a liquidity squeeze, calling them 'untrue and irresponsible'.

JP Morgan Chase was a big lender to some of the US companies in trouble, including Enron and WorldCom. Non-performing assets surged to $4.4bn in the quarter just ended from $2.5bn a year ago, with Enron responsible for $1.13bn of the increase. The Enron loans are now tied up in bankruptcy court.

JP Morgan Chase blamed a difficult trading environment for its disappointing performance. Trading revenues fell 30% though total operating revenue rose from $7.2bn to $7.9bn. Consumer banking operations, however, helped offset some of the trading weakness.

Citigroup, America's largest financial services company, reported a 15% rise in second-quarter earnings to $4.06bn, or 78 cents a share.