IMGCAP(1)]
JPMorgan Chase & Co. reported its managed net charge-off rate on credit card receivables was 10.3% for the third quarter ended Sept. 30, up 530 basis points from 5% during the same quarter a year ago.
The delinquency rate for loans at least 30 days past due was 5.99%, up 208 basis points from 3.91%. A basis point is one-hundredth of a percentage point. Chase boosted its provision for credit losses during the quarter by 127.3%, to $5 billion from $2.2 billion during the same quarter a year ago.
The company's Card Services unit posted a $700 million loss for the third quarter. It was the highest of four consecutive quarters of losses for the card unit. During the same quarter a year ago, the card unit posted net income of $292 million. Charge volume was $82.6 billion, down 12% from $93.9 billion. Excluding the effects of Chase's planned reduction in balance-transfer offers during the quarter, credit card sales volume dropped 6% from a year ago, according to the company.
During a conference call with analysts, Chase Chairman and CEO Jamie Dimon noted the card industry is going through a "substantial adjustment," and "we know we will lose a lot of money next year on" the card business during the first and second quarters of next year as charge-offs continue to rise. Chase is restructuring its card products to handle industry changes, but "you won't see the results until 2011 or 2012," Dimon said.
Companywide, Chase reported net income of $3.6 billion for the quarter, up 529.4% from $572 million a year ago. Revenue rose 81%, to $26.6 billion from $14.7 billion. Chase's investment-banking, asset-management, commercial-banking and retail-banking units drove the bank's strong overall results, according to the company.
