JPMorgan Chase & Co. and Wells Fargo, two big U.S. banks with branches in Connecticut, today posted sizable declines in earnings for the three months ended Sept. 30.
JPMorgan Chase’s profit tumbled 84 percent in the third quarter after it took big hits from souring mortgage investments, leveraged loans and home loans. New York-based JPMorgan has 42 banking offices in Connecticut.
Wells Fargo, which has agreed to acquire Wachovia Corp., including its 75 branches statewide, said that third-quarter profit fell 25 percent as it took hits on investments in troubled finance companies and increased its credit reserves, but results were better than analysts had expected.
Shares of JPMorgan Chase were trading at $40.31, down 40 cents, or 0.98 percent, at 11 a.m. today. Wells Fargo shares were up 92 cents, or 2.74 percent, to $34.44.
Profit at JPMorgan Chase, considered one of the stronger players in the current financial meltdown, also came in better than Wall Street anticipated. But the deterioration seen in all types of loans — from home equity loans to prime mortgages to credit cards — bodes badly for a banking industry that is requiring unprecedented investment from the federal government.
At JPMorgan Chase, the company earned $527 million, or 11 cents per share, compared with $3.4 billion, or 97 cents per share, a year earlier. Analysts polled by Thomson Reuters had predicted a loss of 21 cents per share.
Still, revenue fell below expectations, dropping nearly 20 percent to $14.74 billion from $18.40 billion in the third quarter of 2007. Analysts predicted revenue of $16.01 billion.
The bank’s quarterly results included a charge of $1.2 billion to conform loan loss reserves after buying Washington Mutual Inc.’s banking operations, and a gain of $581 million related to the acquisition.
For the July-to-September period, San Francisco-based Wells Fargo earned $1.64 billion, or 49 cents per share, compared with $2.17 billion, or 64 cents per share, in the prior-year quarter.
Wells Fargo said total revenue rose 5 percent to $10.38 billion.
Analysts had expected a profit of 41 cents per share on revenue of $10.96 billion, according to a poll by Thomson Reuters. (AP)
