JPMorgan Chase & Co., the third-largest U.S. bank, probably will report faster profit growth than its bigger competitors, led by gains in investment banking and reduced expenses from the takeover of Bank One Corp.
JPMorgan may say net income rose 17 percent to $3.59 billion from a year earlier, according to the average estimate of 15 analysts surveyed by Bloomberg. Citigroup Inc., the biggest U.S. bank, said earnings fell 11 percent after expenses to cut jobs. Bank of America Corp., the No. 2 lender, probably earned 6 percent more, according to the analysts.
Fees from underwriting stocks and bonds and arranging mergers boosted JPMorgan’s revenue by $5.4 billion, helping the company weather an increase in bad consumer loans, analysts said. The New York-based bank, led by Chief Executive Officer Jamie Dimon, also saved $2.8 billion in the past year from final expense reductions tied to the $58 billion purchase of Bank One in 2004.
“JPMorgan has simply had the inward focus on cost-cutting that Citigroup has not had until now,” said Anton Schutz, who oversees about $270 million at Mendon Capital Advisors in Rochester, New York. At Charlotte, North Carolina-based Bank of America, the takeover of credit card issuer MBNA Corp. has been “very good,” he said.
Mendon, which owns shares of Bank of America, may invest in New York-based Citigroup if the stock falls to about $50 from the $51.60 closing price on April 13, Schutz said. He’s avoiding JPMorgan shares for now on concern the bank may soon announce a takeover, because Dimon has indicated “he’s ready to go and do something.”