JPMorgan Chase reported slightly higher quarterly profit Wednesday as gains from private-equity deals helped offset $1.64 billion in write-downs on leveraged loans and collateralized debt obligations.
JPMorgan's performance is a vindication for Chairman and Chief Executive Jamie Dimon, who joined the bank after his career path was blocked at Citigroup , where profit plunged 57 percent in the third quarter amid calls for the ouster of CEO Chuck Prince.
"We're just trying to make this as good a company as we can make it," Dimon told reporters on a conference call.
JPMorgan, the third-largest U.S. bank, said net income was $3.4 billion, or 97 cents a share, up from $3.3 billion, or 92 cents a share, a year earlier.
JPMorgan, whose stock rose 3.9 percent to $46.50 in pre-market trading, recorded gains of $766 million from private-equity investments, up from $226 million a year earlier. The bank's write-down on leveraged loans, used for corporate takeovers, was less than what some analysts had expected.
Private equity gains, along with profit growth in asset management and treasury services, helped beat analysts' average earnings forecast of 90 cents a share, according to Reuters Estimates.
"Jamie Dimon is a smart cookie," said Meg McMullen, chief of New England Research & Management, which oversees about $200 million but does not own JPMorgan shares. "He's ahead of the pack here."
JPMorgan's performance stands in sharp contrast to that of most other Wall Street firms, which saw profits plunge in the third quarter. Merrill Lynchexpects to lose money in the quarter on $5.5 billion in write-downs.
JPMorgan's investment banking profit fell 70 percent in the quarter to $296 million, primarily because of markdowns of $1.3 billion, after fees, on leveraged lending commitments, and markdowns of $339 million on collateralized debt obligations.
The bank recently cut about 100 jobs in the investment banking division, and Dimon told the conference call there will be more trimming in hard-hit areas. But he said the bank will add jobs in growth areas.
Before Wednesday, JPMorgan shares were down 7 percent this year.