Bad news for J.P. Morgan Chase & Co. The bank
reported that its quarterly profit fell 84%, ravaged by markdowns on underperforming home lending loans. Net income came in at only $527 million, a far cry from the $3.37 billion in the year-ago quarter.
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J.P. Morgan also
reported the size of the losses it will took on its acquisition of Washington Mutual Inc.
The press release said current-quarter results included an after-tax charge of $1.2
billion to conform loan loss reserves as well as an extraordinary
after-tax gain of $581 million related to the $1.9 billion
acquisition of Washington Mutual's banking operations. The acquisition
strengthens J.P. Morgan's consumer franchise by adding 2,200 branches
to the bank.
To fund the acquisition of Washington Mutual, the bank sold $11.5 billion
of stock in September. It will also receive a $25 billion cash injection
from the U.S. government's financial rescue package. J.P. Morgan's shares were slightly down in premarket trading.
- Maria Woehr
