After what was probably the worst quarter the financial sector will ever see, JPMorgan Chase
During the third quarter, JPMorgan booked $527 million in net income, or $0.11 per share, down almost 90% from the $0.97 per share earned in the same period last year. This quarter's results reflect a few tweaks to adjust for the recent acquisition of Washington Mutual -- strip those out, and the company would have lost $0.06 per share or so. All things considered, it was a pretty respectable quarter. Have a look at a few other numbers:
Metric |
Q3 2008 |
Q3 2007 |
---|---|---|
Revenue |
$14.7 billion |
$16.1 billion |
Net Income |
$527 million |
$3.4 billion |
EPS |
$0.11 |
$0.97 |
Total Deposits |
$970 billion |
$678 billion |
Net Charge-offs |
0.22% |
0.13% |
Book Value Per Share |
$36.95 |
$35.72 |
Tier 1 Capital Ratio |
8.9% |
8.4% |
Everything looks pretty bland here, save for the total deposit numbers. Between the WaMu acquisition and being one of only a handful of banks left with a shred of reputation, JPMorgan is now the largest deposit-bearing bank in the country, leapfrogging the previous leader, Bank of America
The last two independent investment banks -- Goldman Sachs
Now that short-term funding is becoming a thing of the past, he who holds the most deposits becomes the banking king -- in this case, JPMorgan. Add to it that it scored Bear Stearns' prestigious investment banking and prime brokerage for basically nothing, and it's not far-fetched to claim that JPMorgan is the only bank in a much, much stronger position today than it was a year ago.
Stronger, yes, but that doesn't mean things will be a cakewalk going forward. As CEO Jamie Dimon said this morning, "If you are not fearful, you're crazy." That sums it up pretty well: Several years from now, JPMorgan will be one of the top financial institutions in the world -- no doubt about that. The big question -- and a question few can answer confidently -- is what happens between now and then.
For related Foolishness: