Friday, January 16, 2009

JP Morgan 'Fee Income' by Business Segment

Felix at Market Movers details those losses by JP Morgan that reduced their profit (still impressive given the environment - if you believe the #'s) to $702 million:

Interestingly, the bulk of those losses -- $2.9 billion -- came from writing down the investment bank's leveraged loans. During the boom years, it was an article of faith that investment banks needed huge balance sheets, because no one would use their M&A advisory services if they couldn't get cheap loans at the same time.But looking at the scale of these losses, it seems clear that no amount of M&A advisory fees could make up for them: JP Morgan would have been better off financially just simply axing its M&A department altogether.
Breaking out JP Morgan's 'Fee Income' by business segment, I am surprised at how well most have done.

In coming months, we'll see if these other sources of income are enough to outpace what I expect to be growing losses in trading.