The company reported a loss of $380 million in its 3QFY13 results, announced on October 11. This translated into a per share loss of $0.17. The bank reported losses primarily because it has allocated $9.2 billion (pretax) for litigation risks. Core earnings per share for the quarter were reported at $1.42 compared to consensus EPS estimate of $1.30, excluding abnormal items.
Consumer and Community Banking revenues were down due to lower net interest margins on deposits and lower mortgage fees and related income. However, net income for the segment saw growth because of lower provisioning for credit losses.
Corporate and Investment Banking revenues declined 2% year-over-year (YoY). But if debit valuation adjustments on structured notes and derivative liabilities are excluded, revenues essentially stayed flat. However, lower non-interest expenses, primarily due to lower compensation expense, more than offset the overall decline in revenues.
Commercial Banking revenues remained flat, but earnings declined 4% due to higher non-interest expenses. Non-interest expenses rose because of an increase in the number of employees bumped up total compensation expenses.
Net revenues from the Asset Management segment increased because of rising interest and non-interest revenues. Non-interest revenues grew as the demand for JPMorgan’s asset management portfolio services increased. Revenues from interest rates grew because of higher loan and deposit balances. Even though revenues increased 12%, earnings grew by just 7%. This was because of higher employee compensation expenses due to an increase in the number of employees and performance related bonuses.
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