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JPMorgan reports net income of $5.38bn

The annual dividend increased to $1.20 per share.

The financial services provider JPMorgan Chase & Co has reported a net income of $5.38bn for the first quarter ended 31 March 2012, a decrease of 3 per cent compared to $5.55bn for the same period in 2011.

Total net revenue increased by 6 per cent to $26.71bn, against $25.22bn last year.

Earnings per share were $1.31, up from $1.28 in the first quarter of 2011.

The net revenue of investment banking was $7.32bn (2011: $8.23bn). It totalled $7.65bn (2011: $5.46bn) for retail financial services and card services and auto divisions generated $4.71bn (2011: $4.79). In commercial banking, net revenue was $1.66bn (2011: $1.52bn). Treasury and securities services brought in $2.01bn (2011: $1.84bn), asset management raised $2.37 (2011: $2.4bn) and corporate/private equity made $1.69bn (2011: $1.51bn). 

Jamie Dimon, chairman and CEO of JPMorgan Chase, said:

The firm reported strong revenue for the first quarter of 2012 of $27.4bn, up 24 per cent compared with the prior quarter and up 6 per cent compared with prior year. While several significant items affected our results, overall, the firm’s performance in the first quarter was solid.

The firm’s return on tangible common equity for the first quarter of 2012 was 16 per cent, compared with 11 per cent in the prior quarter and 18 per cent in the prior year.

Dimon continued:

We are pleased that our results for the quarter reflected positive credit trends for our consumer real estate and credit card portfolios. Estimated losses declined for these portfolios, and we reduced the related loan loss reserves by a total of $1.8bn in the first quarter. However, with respect to our mortgage banking business, we expect to see elevated levels of costs and losses associated with mortgage-related issues for a while longer. Credit trends across our wholesale portfolios were stable and continued to be strong.

The annual dividend was increased to $1.20 per share. Spurred by the strong balance sheet, the board authorised a new $15bn equity repurchase programme.

Dimon added:

During the first quarter of 2012, the firm provided credit and raised capital of over $445bn for our commercial and consumer clients. We provided more than $4bn of credit to US small businesses, up 35 per cent compared with the prior year. We originated more than 200,000 mortgages in the first quarter. To help struggling homeowners, we have offered more than 1.3 million mortgage modifications since 2009, and completed more than 490,000.


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Lord Geoffrey Howe dies, age 88

Howe was Margaret Thatcher's longest serving Cabinet minister – and the man credited with precipitating her downfall.

The former Conservative chancellor Lord Howe, a key figure in the Thatcher government, has died of a suspected heart attack, his family has said. He was 88.

Geoffrey Howe was the longest-serving member of Margaret Thatcher's Cabinet, playing a key role in both her government and her downfall. Born in Port Talbot in 1926, he began his career as a lawyer, and was first elected to parliament in 1964, but lost his seat just 18 months later.

Returning as MP for Reigate in the Conservative election victory of 1970, he served in the government of Edward Heath, first as Solicitor General for England & Wales, then as a Minister of State for Trade. When Margaret Thatcher became opposition leader in 1975, she named Howe as her shadow chancellor.

He retained this brief when the party returned to government in 1979. In the controversial budget of 1981, he outlined a radical monetarist programme, abandoning then-mainstream economic thinking by attempting to rapidly tackle the deficit at a time of recession and unemployment. Following the 1983 election, he was appointed as foreign secretary, in which post he negotiated the return of Hong Kong to China.

In 1989, Thatcher demoted Howe to the position of leader of the house and deputy prime minister. And on 1 November 1990, following disagreements over Britain's relationship with Europe, he resigned from the Cabinet altogether. 

Twelve days later, in a powerful speech explaining his resignation, he attacked the prime minister's attitude to Brussels, and called on his former colleagues to "consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long".

Labour Chancellor Denis Healey once described an attack from Howe as "like being savaged by a dead sheep" - but his resignation speech is widely credited for triggering the process that led to Thatcher's downfall. Nine days later, her premiership was over.

Howe retired from the Commons in 1992, and was made a life peer as Baron Howe of Aberavon. He later said that his resignation speech "was not intended as a challenge, it was intended as a way of summarising the importance of Europe". 

Nonetheless, he added: "I am sure that, without [Thatcher's] resignation, we would not have won the 1992 election... If there had been a Labour government from 1992 onwards, New Labour would never have been born."

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.