J.P. Morgan Chase & Co. today reported 2003 fourth quarter net income of $1.86 billion, or $0.89 per share, compared to a net loss of $387 million, or ($0.20) per share, for the fourth quarter of 2002. Return on average common equity for the quarter was 17%.
Last year, results were provided on both a reported basis and an operating basis, which excluded merger and restructuring costs and special items. Operating earnings for the fourth quarter of 2002 were $730 million, or $0.36 per share.
For the full year, net income was $6.72 billion, or $3.24 per share, 304% above last year´s reported results of $1.66 billion, or $0.80 per share, and 99% higher than last year´s operating results of $3.38 billion, or $1.66 per share. Return on average common equity was 16% for 2003 compared with 8% on an operating basis for 2002.
William B. Harrison, Jr., Chairman and Chief Executive Officer, said 'In 2003, JPMorgan Chase delivered significantly improved performance - executing well and achieving revenue growth in all major businesses. We had record annual earnings in both the Investment Bank and Chase Financial Services. We had our best quarterly performance since the merger in Investment Management & Private Banking. Our results also benefited from significantly reduced commercial credit costs.'
Mr. Harrison added 'Our recently announced merger with Bank One will enable us to create a firm with a more balanced business mix, greater scale and leadership positions across our major businesses. Together with Jamie Dimon and his team, we will work hard on a successful integration while continuing to focus on our clients. We are confident that this merger will create significant value for our shareholders.'
Highlights for the fourth quarter of 2003:
- The Investment Bank had a return on allocated capital of 20%. Investment banking fees were 28% higher than the fourth quarter of 2002 driven by higher equity underwriting fees, which were at the highest quarterly level in three years.
- Chase Financial Services had a return on allocated capital of 25%. The national consumer credit businesses (mortgage, card and auto) produced double digit earnings growth compared to the fourth quarter of 2002.
- The Investment Bank had a return on allocated capital of 20%. Investment banking fees were 28% higher than the fourth quarter of 2002 driven by higher equity underwriting fees, which were at the highest quarterly level in three years.
- Investment Management & Private Banking had its best quarterly earnings since the merger of Chase and J.P. Morgan.
- JPMorgan Partners had net private equity gains of $159 million and the second consecutive quarter of positive net operating earnings.
- Treasury & Securities Services had a return on allocated capital of 21% and made two significant acquisitions.
- Commercial credit quality continued to improve; commercial credit costs were $753 million lower than in the fourth quarter of 2002.
- All businesses posted revenue growth in 2003 compared to 2002, with significant improvement in the return on average common equity at 16% for 2003.
- The Investment Bank had record earnings of $3.7 billion for the full year, up 183% from 2002, driven by strong growth in capital markets revenues and equity underwriting fees and a significant decline in credit costs. The return on allocated capital was 19% for the year.
- The Investment Bank improved its ranking in Global Equity & Equity-Related from #8 to #4 while maintaining its #1 ranking in Global Syndicated Loans, #2 ranking in Global Investment Grade Bonds and #5 ranking in Global Announced M&A according to Thomson Financial.
- Chase Financial Services posted record earnings of $2.5 billion and a return on allocated capital of 28% for the year. Record revenues of $14.6 billion were driven primarily by Home Finance revenues which were up 38% from 2002.
- JPMorgan Partners´ performance improved significantly with net private equity gains of $27 milli
Highlights for the full year 2003:
