JPMorgan Sees Big Rise in Credit Card Defaults

Published on:
12 September 2006 at 10:20 a.m. ET

Written by: Unknown Author –

http://www.insidearm.com/news/00015957-jpmorgan-sees-big-rise-in-credit-card-def/

JPMorgan Chase & Co., the third- biggest U.S. bank, is depending on cost cuts and investment banking fees to rescue earnings from credit-card defaults, which may have climbed by $700 million in the fourth quarter.

Chief Executive Officer James Dimon has shed more than $2 billion in annual expenses since JPMorgan acquired Bank One Corp. in 2004. Earnings at the New York-based company’s most profitable business, investment banking, probably increased 9 percent in the final three months of 2005. A new bankruptcy law that went into effect in October may have caused defaults on credit cards to increase to $2.3 billion from $1.6 billion in the third quarter.

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