NEW YORK — JPMorgan Chase & Co. will report investment-banking revenue essentially flat with the third quarter, while mortgage-banking results will slip and credit cards will improve, Chief Executive Jamie Dimon is expected to say later Wednesday.
Dimon will be presenting at a Goldman Sachs financial-services conference in New York later Wednesday and, according to a slide presentation for his appearance, will deliver several forecasts for the fourth quarter, due to be reported next month.
Among the forecasts, Dimon will say the investment bank's revenue will remain consistent with the third-quarter performance, when the revenue dropped 13% from the prior year. The forecast, the slides said, would exclude any adjustment made to the bank's accounting as a result of the market prices on its own debt. That adjustment had led the investment bank to book a $1.9 billion gain last quarter, an accounting move likely to be at least somewhat reversed this quarter.
Dimon will also say that production revenue in mortgage banking will be down from the third quarter as volumes slowed and the rates on the mortgages fell. The company's mortgage-banking unit will also suffer from increased repurchases of bad mortgages, the slides said, noting it is a "timing issue."
Furthermore, the bank will also likely reduce the value of its mortgage-servicing rights by another $100 million in the quarter.
Offsetting some of the mortgage declines will likely be another strong quarter for the bank's credit-card unit, which Dimon is expected to say will report "modestly better" charge-offs than in the third quarter.
In the bank's other units, asset management will report lower performance fees, private equity will post a "modest loss" and corporate will have net income "slightly better" than the break-even quarter forecast before.
Looking further ahead to 2012, with interest rates expected to remain down, Dimon is expected to say that net income could be reduced by some $400 million as a result of interest rates alone.
On the bank's capital status, Dimon is expected to say it will hit global requirements faster than expected, because the market will "demand" a "race to the top." Still, Dimon expects "healthy" stock buybacks and a "modest dividend increase" as it meets the criteria.
Dimon's slides said the bank has the ability to repurchase $950 million in additional shares, after exhausting its previous $8 billion allowance. The extra amount comes from "a reallocation of previously approved capacity" from the Federal Reserve's stress tests last year.
The bank will go in front of another stress test next month, and Dimon is expected to say Wednesday that he doesn't expect it "to be an issue."
