JP Morgan Chase has revealed improved net
income results for the cards services division in its Q2
2011 report.
Lower provision of credit losses, offset
partially by lower net revenue, resulted in net income of $911m, an
increase of $568m from the same point in 2010.
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The bank’s card services’ net revenue stood at $3.9bn
for the quarter, a 7% decrease from the prior year. Lower average
loan balances, legislative changes and decreased level of fees led
to a 13% decrease in net interest income to the current $2.9bn.
The provision for credit losses decreased from
$2.2bn in the prior year to the present $810m. The firm also
reported lower estimated losses which led to lower net charge-offs
and a $1bn reduction to loan losses allowance.
“We are pleased to report that our results for
the quarter reflected continued improvement in credit trends across
our consumer and wholesale portfolios,” said Jamie Dimon, chairman
and CEO of JP Morgan Chase.
“With respect to our credit card portfolio,
delinquencies and net charge-offs improved, and we reduced loan
loss reserves by $1bn as estimated losses declined. We expect
credit card net charge-offs to continue to improve next quarter as
we approach a more normalised credit environment.”
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By GlobalData2m new accounts were opened during Q2 2011 and merchant
processing volume grew by 17% to $137.3bn on 5.9 bn
transactions processed.
