JPMorgan Credit Swaps Climb as Bank Results Rest on Reserves |
| Bloomberg - Jan 14, 2011 |
The cost to protect debt issued by JPMorgan Chase & Co. climbed, pulling credit-default swaps on its peers higher, after the bank reported a fourth-quarter profit based heavily on changes to loss reserves.
Credit-default swaps on the second-biggest U.S. lender by assets rose 3.5 basis points to 84 basis points at 9:35 a.m. in New York, according to broker Phoenix Partners Group. The bank’s net income increased to $4.83 billion, or $1.12 a share, from $3.28 billion, or 74 cents, a year earlier as it released $2 billion in reserves while adding to a cushion against future losses tied to its 2008 purchase of Washington Mutual Inc., the New York-based company said.
“The numbers don’t look nearly as strong as the headlines would suggest,” a group of strategists led by Michael Reiner at Soceite Generale SA wrote in a note today after the earnings report. “A large portion of the earnings beat came from a large drop in loss provisions at JPM’s credit card segment.”
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- Posted: 2011-01-14 13:09:59
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