50% profit fall at JPMorgan Chase

JPMorgan Chase has revealed its Q1 profit plunged more than 50% after suffering $5.1bn (£2.5bn) in writedowns on mortgage-backed security investments.

The US bank, which last month bailed out former US rival Bear Stearns, says profit for the three months to March fell to $2.37bn compared with $4.79bn during Q1 last year.

Jamie Dimon, chief executive and chairman of JPMorgan Chase, says: “Our earnings this quarter were down significantly as market conditions and the credit environment remained challenging.”

He adds: “Retail financial services again increased loan loss reserves related to home equity and sub-prime mortgages as performance in these portfolios continued to deteriorate.

“However, the firm as a whole maintained solid business momentum and our capital position remained strong.”

He says the acquisition of Bear Stearns will add new capabilities in prime brokerage and help improve improving strength in equities, mortgage trading, commodities and asset management.

He adds: “We welcome the employees of Bear Stearns and look forward to working together to build increased franchise value.”