JPMorgan Chase, the largest US
banking group by market cap, has reported better-than-expected
first quarter 2009 net income of $2.1 billion, a 10 percent
year-on-year decrease but a considerable improvement on Q408’s net
income of $702 million.

In retail financial services, however,
rising credit losses saw net income dip from $624 million in Q408
to $474 million. Credit loss provisions totalled $3.9 billion,
versus $3.6 billion in the fourth quarter of 2008.

Of greater concern, the figures also revealed
the extent to which the economic malaise has spread across income
segments: while total non-performing loans in the subprime mortgage
segment remained relatively flat at $2.5 billion, non-performing
prime mortgages amounted to $2.7 billion, a 43 percent
quarter-on-quarter increase. Total quarterly home lending losses
could reach as much as $2.4 billion over the next several quarters,
Chase said.

The bank’s card division also suffered further
losses, reporting a net loss of $547 million versus a Q408 net loss
of $371 million and a Q108 profit of $609 million. The managed net
charge-off rate rose from 5.56 percent to 7.72 percent on the

Chase reported a 2 percent quarterly rise in
both current accounts and average total deposits, which now stand
at 25 million and $345.8 billion, respectively. The deposit margin
stood at 2.85 percent, compared with 2.94 percent in the prior
quarter and 2.64 percent in the first three months of 2008.

It added that integration of fallen US thrift
Washington Mutual (WaMu), purchased in September 2008, remained on

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Chase has now rebranded over 700 WaMu branches
and 1,900 ATMs as well as consolidating almost 300 branches in the
first quarter of 2009. The bank’s total US branch network now
stands at 5,186, with a further 92 branches expected to close in
2009 as part of the consolidation process.

“We are confident that even a highly adverse
economic scenario would not compromise our overall strength and
stability – or our ability to enhance our franchises,” said
JPMorgan Chase’s CEO Jamie Dimon.