After he used his “fortress balance sheet” during the 2008 financial crisis to emerge stronger than ever, winning America’s heart in the process, one would think that a $4.4 billion third-quarter profit would be a fairly pedestrian matter for JPMorgan Chase CEO Jamie Dimon. Fortunately, we don’t have to guess what Dimon thinks, because he’s been so kind as to provide a statement in the company’s latest earnings report.
Let’s see what he has to say for himself following this 23 percent year-over-year increase. “The Investment Bank delivered solid earnings while maintaining its number one ranking in Global Investment Banking Fees. Retail Financial Services reported strong mortgage loan production.” Great! But is everything beautiful roses and chirping birds, Jamie?
Maybe not quite; revenue fell 15 percent year over year to $24.3 billion: “We are pleased to report a continued overall decline in credit costs, although our mortgage and credit card portfolios continued to bear very high net charge-offs. Our mortgage delinquency trends remained relatively flat compared with the prior quarter, and we expect mortgage credit losses to remain at these high levels for the next several quarters.”
That caution reflects the kind of prudence that has steadied Dimon’s hand through some really tough economic times. But how bout that fortress balance sheet? How does it stack up against the new Basel III requirements?
“Our fortress balance sheet continued to strengthen, ending the quarter with a strong Tier 1 Common ratio of 9.5%. We believe that the quality of our balance sheet will position us well for the eventual implementation of new capital standards being developed by bank regulators. Our total firmwide credit reserves declined to $35.0 billion, resulting in a firmwide coverage ratio of 5.1% of total loans.”
Okay, Jamie, we know you care about achieving financial security for your firm. But what about the greater well-being of America?
“We are firmly committed to doing all we can to support the ongoing economic recovery. We are providing capital, financing and liquidity to our clients in the U.S. and around the world. So far this year, we have loaned or raised capital for our clients of more than $1.0 trillion, and our small-business originations were up 37%. In addition, we are on track to hire over 10,000 people in the U.S. this year … We will continue to devote substantial resources to ensure regulatory reforms are implemented in a way that preserves the value we deliver to our clients.”
It’s not every day — maybe not even every generation — that a banker has both a heart and a wallet made of solid gold. Thank God for Jamie Dimon, perhaps the greatest and most firmly committed banker of all time.