FICC income from GS and Investment Banking income from JPM

Discussion in 'Wall St. News' started by apple, Apr 16, 2009.

  1. apple


    These two are the biggest number showing on the earnings report. Wonder whether these firms united together to manipulate the equity market with some of TARP money during 1Q? Anyone have any idea about that?
  2. Well, seeing as how FICC stands for 'fixed income, currencies and commodities', how do you figure manipulation of the equity mkt has anything to do with it?
  3. Daal


    $1.6b from JPM $2.1b net figure came from the Investment Banking division, that same division that lost them $2.3b last quarter. Same thing with GS. This is hedge fund business, it doesnt deserve a big multiple because of is so volatile and you never know when it will blow up.
  4. apple


    If you were watching the market day by day, you would feel it, but Zerohedge's data verified that.
  5. Well if anyone was going to have record investment banking revenues in Q1 it was going to be JP Morgan. Here’s the bank’s summary:

    • Generated record firmwide revenue of $26.9 billion and pretax, pre-provision profit of $13.5 billion (on a managed basis 1):
    - Record revenue and net income in the Investment Bank; #1 rankings for Global Debt, Equity and Equity-related volumes and Global Investment Banking Fees
    - Solid growth in liability balances in Commercial Banking and Treasury & Securities Services
    - Washington Mutual integration on track, driving Retail Banking growth in deposits by 62% and in checking accounts by 126%
    - Net assets under management inflows of $119 billion over the past year in Asset Management

    As for its balance sheet, which we note is a “fortress” of a balance sheet (moat presumably included to defend the bank from all those hostile toxic assets) they say:
    • Fortress balance sheet strengthened further:
    - Tier 1 Capital of $137.2 billion, 11.3% Tier 1 Capital ratio (9.2% excluding TARP capital)
    - $87.2 billion of tangible common equity1, 7.2% of risk-weighted assets
    • Added $4.2 billion to credit reserves, bringing total to $28.0 billion, and firmwide loan loss coverage ratio to 4.53%2 as of March 31, 2009
    • Continued lending and ongoing foreclosure prevention efforts:
    - Extended approximately $150 billion in new credit to an estimated 4.5 million consumers (through credit cards, mortgages, auto and student loans), and to small and mid-sized businesses and large corporations
    - Purchased nearly $34 billion of mortgage-backed and asset-backed securities
    - Prevented almost 150,000 loan foreclosures since October 2008, bringing the total to over 400,000 since early 2007; opened the remaining 22 of our 24 new Chase Homeownership Centers and added over 650 loan counselors during the quarter /

    However, we also note Meredith Whitney’s credit card predictions are coming true, the bank experiencing what CEO Jamie Dimon called ‘extremely high’ credit costs of $10bn largely in card services and retail financial services.

    Here’s the relevant par:

    The managed provision for credit losses was $10.1 billion, up by $5.0 billion, or 97%, from the prior year. The total consumer-managed provision for credit losses was $8.5 billion, compared with $4.4 billion in the prior year, reflecting higher net charge-offs, as well as increases in the allowance for credit losses primarily related to credit card loans and home lending.

    Consumer-managed net charge-offs were $5.7 billion, compared with $2.5 billion in the prior year, resulting in managed net charge-off rates of 4.90%2 and 2.68%, respectively.

    The wholesale provision for credit losses was $1.5 billion, compared with $747 million in the prior year, and resulted from an increase in the allowance for credit losses reflecting a weakening credit environment. Wholesale net charge-offs were $191 million, compared with net charge-offs of $92 million in the prior year, resulting in net charge-off rates of 0.32% and 0.18%, respectively. The firm’s nonperforming assets totaled $14.7 billion at March 31, 2009, up from the prior-year level of $5.1 billion.
  6. lediana


    Thanks for the suggestion, I wish it had worked.

    credit auto:D