Do JPMorgan’s Earnings Results Bring Trouble for the Big Banks?

Shares of investment bank JPMorgan Chase are trading lower today after some comments by CEO Jamie Dimon regarding the valuation of the company’s debt.

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The CEO commented, in part, “The [debt valuation adjustment] reflects an adjustment for the widening of the Firm’s credit spreads, which could reverse in future periods and does not relate to the underlying operations of the company.  All things considered, we believe the Firm’s returns were reasonable given the current environment.”  This adjustment created $1.9 billion of JPMorgan’s total net income of $4.3 billion.  Traders and investors obviously look askance at accounting manipulations meant to bolster the bottom line.

Following is some stock price performance information for JPMorgan Chase and that of some of its competitors.

  • JPMorgan Chase & Co. (NYSE:JPM): The shares recently traded at $31.64, down $1.55, or 5.67%, on the day.  The shares have traded in a 52-week range of $27.85 to $48.36 and its market capitalization is $123.29 billion.  About the company: JPMorgan Chase & Co. provides global financial services and retail banking.  The Company provides services such as investment banking, treasury and securities services, asset management, private banking, card member services, commercial banking, and home finance.  JP Morgan Chase serves business enterprises, institutions, and individuals.
  • Bank of America Corp. (NYSE:BAC): The shares recently traded at $6.27, down $0.31, or 4.71%, on the day.  The shares have traded in a 52-week range of $5.13 to $15.31 and its market capitalization is $63.54 billion.  About the company: Bank of America Corporation accepts deposits and offers banking, investing, asset management, and other financial and risk-management products and services.  The Company has a mortgage lending subsidiary, and an investment banking and securities brokerage subsidiary.
  • Wells Fargo & Company (NYSE:WFC): The shares recently traded at $25.95, down $1, or 3.71%, on the day.  The shares have traded in a 52-weel range of $22.58 to $34.25 and its market capitalization is $137.65 billion.  About the company: Wells Fargo & Company is a diversified financial services company providing banking, insurance, investments, mortgage, leasing, credit cards, and consumer finance.  The Company operates through physical stores, the Internet and other distribution channels across North America and elsewhere internationally.
  • Citigroup, Inc. (NYSE:C): The shares recently traded at $27.64, down $1.57, or 5.38%, on the day.  The shares have traded in a 52-week range of $21.40 to $51.50 and its market capitalization is $80.65 billion.  About the company: Citigroup, Inc. is a diversified financial services holding company that provides a broad range of financial services to consumer and corporate customers around the world.  The Company’s services include investment banking, retail brokerage, corporate banking, and cash management products and services.
  • Goldman Sachs Group, Inc. (NYSE:GS): The shares recently traded at $95.69, down $3.44, or 3.47%, on the day.  The shares have traded in a 52-week range of $84.27 to $175.34 and its market capitalization is $48.4 billion.  About the company: The Goldman Sachs Group, Inc., a bank holding company, is a global investment banking and securities firm specializing in investment banking, trading and principal investments, asset management and securities services.  The Company provides services to corporations, financial institutions, governments, and high-net worth individuals.

(Note: Selected financial data are sourced from Google Finance.  All data are assumed to be accurate.)

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