By Elinor Comlay
NEW YORK (Reuters) - JPMorgan Chase & Co
The results at the second-largest U.S. bank sent its shares up as much as 3.9 percent to a 12-month high, making it among the biggest gainers in the Dow Jones industrial average, and underscored an industry-leading role that was strengthened by its resilience during the 2008 financial crisis.
Some investors had looked to JPMorgan -- the first of the major banks to report -- to end nagging worries over banks' health, and reassure Wall Street that the financial crisis was fading.
Banks broadly rallied on the news and the KBW Banks Index <.BKX> was up 2.8 percent in afternoon trading.
"JPMorgan is a bellwether for many of the financials," said Matt McCormick, a portfolio manager and banking analyst at Bahl & Gaynor Investment Counsel in Cincinnati. "Anyone who does not come in with similar results will suffer the consequences in the market."
JPMorgan's closest rivals, Bank of America Corp
Analysts broadly expect Bank of America to report a profit of 9 cents a share, down from 40 cents a share a year earlier, while Citigroup is expected to break even after reporting a 18 cent per share loss for last year's first quarter, according to Thomson Reuters I/B/E/S.
Goldman Sachs Group
The New York-based bank reported a quarterly profit of $3.3 billion, or 74 cents a share, compared with $2.1 billion, or 40 cents a share, a year earlier.
Chief Executive Jamie Dimon, who has typically been cautious about the bank's outlook, was upbeat on a call with journalists.
"The chance of a double dip is rapidly going away," he said. "This could be the makings of a good recovery."
He said the bank is adding staff "everywhere," although he also said he would want to see continued and sustained improvement in employment and credit losses before raising the dividend.
JPMorgan said it plans to add 9,000 employees in the U.S. The bank has added 7,054 people, or 3 percent of its total headcount, since the end of the first quarter last year.
REGULATION
Dimon, who has been an outspoken critic of the Obama administration's proposed regulatory reforms, was again vocal in a call with analysts following the earnings release.
In particular, he warned about plans to bring trading of the instruments known as over-the-counter derivatives onto exchanges. This could hit the bank's revenue by "$700 million to a couple billion dollars," Dimon said.
While President Barack Obama was pressuring lawmakers in Washington to approve his financial reform bill, Dimon renewed his criticism of the proposed bailout fee on big banks, which the White House has said could raise up to $117 billion over the next 10 years.
"Let's not call it a bank fee," Dimon said. "Let's call it what it is, which is a punitive bank tax."
The U.S. government kick-started the economy last year with a series of measures like cutting interest rates that many analysts noted played in banks' favor, paving the way for financial institutions to borrow at historically low levels while lending at higher rates.
Dimon, who repeatedly complained that the bank did not want nor need government bailout funds, also told analysts that JPMorgan was well positioned to handle the possibility of rising interest rates.
LOWER LOSS EXPECTATIONS
The investment bank unit had a bumper quarter, reporting quarterly net revenue of $8.3 billion, almost matching last year's record of $8.4 billion in the first quarter. Dimon and Chief Financial Officer Michael Cavanagh said this business was strong across all regions and asset classes.
The pair were somewhat more cautious about the outlook for the bank's retail financial services business, which includes the Chase bank, mortgage and other consumer lending. "If things start to peak out and the economy gets better, you're through the worst part; but there's a ways to go," Dimon said.
The credit card business, which has been a hot-point for losses since U.S. unemployment started to soar last year, showed signs of improvement, the bank said. JPMorgan trimmed its loss expectations and cut the unit's reserve for loan losses by $1 billion.
Revenue rose 5 percent to $28.2 billion, beating analysts' expectation of $26.5 billion.
JPMorgan's shares were up $1.80 or 3.9 percent at $47.67 on the New York Stock Exchange. The shares have climbed 10 percent since the start of the year.
(Reporting by Elinor Comlay with additional reporting by Dan Wilchins and Steve Eder; Editing by Gerald E. McCormick)
