J.P. Morgan Chase reported this morning that fourth quarter credit card profits declined 15% year-on-year to $609 million, compared to $786 million in the prior quarter and $719 million in the year-ago quarter. End-of-period managed loans of $157 billion increased by 3% year-on-year. Charge volume of $95.5 billion increased by 2% from 4Q/06. Net accounts opened during the quarter were more than 5.2 million. Merchant processing volume of $194.4 billion increased 9% compared to the year-ago quarter. Net interest income of $3.1 billion was flat compared to the third quarter, but rose 6% compared to 4Q/06. The increase in net interest income was driven by a higher level of fees, a wider loan spread and higher average loan balances. Chase notes that these benefits were offset partially by the discontinuation of certain billing practices (including the elimination of certain over-limit fees and the two-cycle billing) and the effect of higher revenue reversals associated with higher charge-offs. The managed provision for credit losses was $1.8 billion, an increase of $507 million, or 40%, from the prior year, due to an increase of $300 million in the allowance for loan losses and a higher level of charge-offs. The managed net charge-off rate for the quarter was 3.89%, up from 3.45% in the prior year and 3.64% in the prior quarter. The 30-day managed delinquency rate was 3.48%, up from 3.13% in the prior year and 3.25% in the prior quarter. For complete details on Chase’s fourth quarter performance, visit CardData ([www.carddata.com]).
JPM CHASE HISTORICAL ($billions)
4Q/06 1Q/07 2Q/07 3Q/07 4Q/07
EOP Outstandings: $152.8 146.6 148.0 149.1 157.1
Charge Volume: $ 93.4 81.3 88.0 89.8 95.5
Source: CardData (www.carddata.com)