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JPMorgan Chase & Co. today announced its Card Services unit lost $547 million during the first quarter ended March 31, compared with a profit of $609 million during the same quarter a year earlier. Revenues for the unit were $5.1 billion, up 30.8% compared with revenues of $3.9 billion for the first quarter of 2008. The revenue gains were offset by a sharp increase in charge-offs and lower income from credit card fees, the company said. Charge-offs on managed loans during the quarter rose to 7.72% from 4.37% during the prior year, and the 30-day managed delinquency rate was 6.16%, up from 3.66% a year earlier. Chase said its acquisition last year of teetering Washington Mutual Corp. increased Chase's charge-off and 30-day delinquency rates for the quarter by 86 and 82 basis points, respectively. Chase's managed provision for credit losses was $4.7 billion, an increase of $3 billion, or 176%, compared with the same quarter a year earlier. Chase held $176.1 billion in managed loans at the end of the quarter, up 16.7% from $150.9 billion a year earlier. The company said it opened 2.2 million new credit card accounts during the quarter. Michael Cavanaugh, Chase's chief financial officer, said today in a conference call with analysts that because of rising unemployment rates, Chase's credit card charge-offs may reach 9% during the second quarter. James Dimon, Chase's chairman and CEO, said that he expects card charge-offs to "creep upward" during the second half of the year, but "we really don't know because we don't have that much visibility ... into the third and fourth quarters." As a company, Chase beat analyst expectations by posting net income of $2.1 billion, down 12.5% from income of $2.4 billion a year ago and total net revenue of $25 billion, up 48% compared with $16.9 billion.
