Buying Bank One cut J.P. Morgan’s risk

Article Excerpt

J.P. MORGAN CHASE & CO. $38 (New York symbol JPM; WSSF Rating: Above average) is the third-largest bank in the United States, after Citigroup and Bank of America. The company provides a wide range of personal financial services including deposits, checking, loans and mortgages, through over 2,500 branches in 17 states. Other businesses include corporate banking, brokerage and wealth management services. It has offices in over 50 foreign countries. J.P. Morgan’s revenue grew from $10.8 billion in 2001 to $19.8 billion in 2005, mainly due to its 2004 acquisition of Bank One Corp. for $58 billion in stock. Earnings fell from $0.81 a share (total $1.7 billion) in 2001 to $0.80 a share ($1.66 billion) in 2002, but rose to $3.24 a share ($6.7 billion) in 2003 due to a 65% drop in loan loss provisions. Thanks to Bank One, income in 2004 grew to $8.2 billion. But per-share earnings fell to $2.86, because it had more shares outstanding. In 2005, J.P. Morgan…

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