JPMorgan Chase & Co. had a big third quarter, with profits spiking by 23% -- but it also appears to have had a successful quarter, and year, recruiting financial advisers.
At the end of the third quarter, the New York-based bank had 2,209 financial advisers, a 7% increase from the second quarter and a 17% increase from one year ago, according to JPMorgan's earnings supplement. That's an increase of roughly 300 financial advisers to its headcount in the last 12 months.
(Click here for the full breakdown of JPMorgan's adviser and broker head count.)
The company also reported a total of 418 securities brokers at the end of the third quarter, up 15% from 365 at the end of the third quarter in 2009. That business was formerly known as Bear Stearns Private Client Services, which JPMorgan acquired and officially transitioned on at the start of 2010.
More broadly, JPMorgan Chase & Co. also said Wednesday that its third-quarter profit jumped 23 percent because the banking giant was able to set aside less money to cover loan losses.
CEO Jamie Dimon did warn that loan losses are still high in both the mortgage and credit card portfolios, but they are no longer rising like they did during the recession. That enabled JPMorgan Chase to set aside $1.55 billion to cover losses in its retail financial services division, less than half the $3.99 billion in loss provisions recorded in the same period a year ago. Loan loss provisions in its credit-card business fell to $1.63 billion from $4.97 billion last year.
Dimon said the bank, the country's second-largest by assets and the first big bank to report quarterly results, expects losses in its credit-card division to fall in the next quarter.
The New York bank earned $4.42 billion, or $1.01 per share. It earned $3.59 billion, or 82 cents, during the same quarter last year.
The results came in well ahead of the 90 cents per share that analysts polled by Thomson Reuters were expecting. Shares rose 50 cents to $40.90 in pre-opening trading.
Profit in the investment bank, which has been a big strength for JPMorgan Chase in recent quarters, fell 33 percent. The drop was due mainly to lower fees from underwriting stock offerings.
Debt underwriting picked up sharply, however, as many companies took advantage of historically low interest rates to raise new cash through the bond market instead of through issuing new shares.
Income from trading currencies, bonds and other fixed-income products fell 38 percent during the quarter as interest rates remained low.
JPMorgan Chase and other major banks including Goldman Sachs Group Inc. posted huge trading profits last year as financial markets were recovering from the credit crisis, allowing them to offset losses from defaults on mortgages and credit cards.
Now that investment banking profit is slipping, a pickup in earnings from retail banking is helping JPMorgan Chase. Income from its retail banking division, which had the sharp decline in loan loss provisions, jumped to $907 million from just $7 million during the third quarter last year.
JPMorgan's credit card business earned $735 million in the third quarter after losing $700 million during the third quarter in 2009.
Even though JPMorgan Chase slashed its loss provisions during the quarter, it still holds reserves of 5.1 percent companywide to cover future losses, compared with 5.3 percent during the year-ago quarter.
The Associated Press contributed to this report
