The article, in short, reveals positive figures for JP Morgan's performance for 2010. It increased its profit that year from 11.4 billion dollars the year before to 17.4 billion, a 47 % increase. This was apparently due to a better consumer lending environment and retail financial services, which include everything from mortgages to credit cards to checking accounts.
The financial report could pave the way for JP Morgan to increase its dividend by as much as a dollar.
The bank however is facing litigation coming from its mortgage business. Along with other several banks, they are going through state and private investigations over questionable foreclosure procedures. Homeowners and state regulators have claimed that banks foreclosed on homes without proving the owned the mortgages. Some banks are even being accused of forging documents in foreclosure procedures.
Speculation over the banking system's ethics is not a new subject. Many have been known to use immoral tactics to make profit. But with so much power it is hard to monitor everything a bank may or may not do. Many of these investigations do not harm the banks.
Since the financial crisis, JP Morgan has a come a long way from when it earned 0.06 dollars a share in the fourth quarter of 2008. “Solid performance in the quarter and for the year reflected good results across most of our businesses, which benefited from strong client relationships and continued investments for growth,” said JP Morgan’s chief executive, Jamie Dimon.
The bank is constantly hinting at increasing its dividend but first, like many other banks, must receive the green light from the Federal Reserve to complete its second round of "stress tests" to determine the capabilities of certain banks. This is an initiative to help prevent banks from striving for too much and ending up losing it all as was one of the main causes of the 2008 financial crisis.
Good news for banks is a bright light for the general recovery of the broader economy. “It’s not like issues from the financial crisis are going away, but we think we’ll see positive overtones as to how the economic recover is taking hold,” said Moshe Orenbuch, an analyst at Credit Suisse.
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