JP Morgan’s blow-out quarter leaves Winters in wonderland
JP Morgan more than doubled its net investment banking profits in the third quarter compared to a year ago, providing the perfect send off to former co-chief executive Bill Winters, who left the Wall Street giant just over two weeks ago.
Net profits from investment banking hit $1.9bn (€1.3bn) in the third quarter, up from $882m in the same period last year and a 31% increase on the second quarter, according to the bank's results for the period released today. The figure is an ideal send-off for Winters from the division he jointly-led until late last month.
The jump in profits was driven by the bank's markets businesses with equity markets revenues increasing 33% quarter-on-quarter to $941m, while fixed-income revenues rose 2%. Compared to the third quarter last year, fixed-income markets revenues surged from $815m to $5bn.
Profits for the first nine months of 2009 hit nearly $5bn, up 320% on the same point last year, while total revenues for the year so far stand at $23.2bn, up from $12.6bn at the same point in 2008.
Here, Financial News provides a breakdown of the investment bank's key figures in the third quarter, and also the performance of its asset management division.
• Headcount and compensation
Staff numbers at the investment bank have fallen steadily this year and total headcount stood at 24,828 at the end of the third quarter. The firm employs 6,165 fewer people than it did 12 months ago. Overall staff compensation has increased from one year ago and was $2.8bn versus $2.2bn in the third quarter of 2008.
• Geographic split
The Americas business is once again the investment bank’s leading revenue source and contributed nearly $4bn of the investment bank's $7.5bn in net revenues in third quarter. Europe, the Middle East and African revenues at $2.9bn were up 13% year-on-year and 28% versus the second quarter.
• Underwriting and advisory
Equity and debt underwriting revenues were down on the second quarter at $681m and $593m, but up year-on-year by 31% and 19% respectively. Advisory revenues at $384m were down compared to last year and to the previous quarter.
• Asset management
The asset management division reported a 23% rise in net income over the quarter to $430m, compared with $351m for the same period last year. The improvement came after a rise in assets under management belonging to both retail and institutional investors, and a mild decline in expenses – headcount across the funds division declined 4% over the 12 months.
--write to hwilson@efinancialnews.com; pcraig@efinancialbnews.com
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