NEW YORK — The banking sector looked a little brighter for a second straight day Thursday after JPMorgan Chase & Co. reported better-than-expected results despite a spike in mortgage and other loan defaults.
The bank’s shares gained more than 13 percent Thursday after it reported a 53 percent drop in profit. Following Wells Fargo & Co.’s stronger-than-expected results released Wednesday, investors appear more confident that the banking sector, while struggling, will be propped up by some of its healthier players.
However, JPMorgan Chase, like its weaker competitors, still has a tough environment to slog through as the aftermath of the mortgage and credit crisis continues. Even the bank’s more creditworthy borrowers are failing to make their mortgage payments — the charge-off rate for prime mortgages, which include more than $34 billion in jumbo mortgages and $2.5 billion in alt-A mortgages, nearly doubled from the first quarter to the second, from 0.48 percent to 0.91 percent.
JPMorgan Chase earned $2 billion, or 54 cents per share, in the April-to-June period, down from $4.23 billion, or $1.20 per share, in the same time frame last year. Revenue slipped 3 percent to $18.4 billion. Analysts surveyed by Thomson Financial had predicted, on average, a profit of 44 cents a share on $16.6 billion in revenue.
