J. P Morgan Chase & Co on April 18 reported a 55 percent increase in quarterly earnings, helped by gains in investment banking and private equity, and bolstered its dividend and stock buyback plan. Net income rose to $4.8 billion or $1.34 a share from $3.1 billion, or 86 cents, a year ago.
Results were boosted by a one-time gain of $391 million, or 11 cents a share from the adoption of a new accounting rule. Analysts, on average, had forecast earnings of $1.02 before extraordinary items, according to Reuters Estimates.
J. P Morgan shares were up 2.9 percent in pre-market electronic trading after the results. The No 3 US bank also said it was raising its quarterly dividend by 12 percent to 38 cents a share and authorised a new $10 billion stock buyback program.
The repurchase plan replaces a prior, $8 billion one which had $850 million remaining to be bought. J. P Morgan shares are up 3.9 percent so far this year, outperforming the KBW Banks index, which was down 1.9 percent for the same period.
The No 3 US bank has been focused on growth, changing course from its previous focus on cost savings from a series of previous acquisitions and mergers.
Executives have said they plan to invest $1 billion in investment banking in 2007 - about one third greater than in 2006 - to expand in markets including energy trading in Asia.
Investment banking was one of the bank's strongest areas in the quarter, posting an 81 percent gain in profit to $1.54 billion, helped by strong revenue from fees.
Retail banking profit fell 2 percent to $859 million as its provision for credit losses more than tripled from a year ago to $292 million due to higher losses in its subprime mortgage portfolio and on home equity loans.
Gains on private equity investments helped J. P Morgan's corporate bank swing to a $631 million profit from a $366 million loss in the year-ago period.