JP Morgan Profit Drops 34% in Q4

$1.3B in subprime writedowns hit earnings at third-largest bank
By Jim O'Neill,  Newser User
Posted Jan 16, 2008 7:03 AM CST
The headquarters for J.P. Morgan Chase & Co. is shown in this Jan. 17, 2006 file photo in New York.    (Associated Press)
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(Newser) – Subprime mortgage writedowns of $1.3 billion cut deeply into better-than-expected revenue gains at JP Morgan Chase in the fourth quarter, leaving the nation’s third-largest bank with net income of $2.97 billion, or 86 cents per share, a 34% drop from a year ago, reports Bloomberg. The writedown is a pittance compared to Citigroup’s $18.1 billion announced yesterday.

The bank’s $17.4-billion revenue was 7% over last year, slightly more than analysts had expected. It was the first profit slip since 2005. Morgan, focused more on retail banking more than its rivals, was exposed less to the subprime contagion. Morgan’s market value slipped 18% in the past 12 months; Citi lost 50% and Bank of America 29%.