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To: Lucretius who wrote (102881)	5/17/2001 8:34:55 AM
From: MythMan	Read Replies (1) \| Respond to of 436258

>>B] JP Morgan Chase: Weak markets, equity losses to hurt 2001 profit Updated Wed 5/16/2001 12:49 EDT --JP Morgan says falling rates may slash mortgage profit --JP Morgan: Merger's revenue boost less than planned amid slump --JP Morgan sees more paper losses in equity portfolio in 2001 --JP Morgan sees 2001 private-equity net gains lower vs 2000 By Joseph A. Giannone New York, May 16 (BridgeNews) - J.P. Morgan Chase & Co. says sharply falling interest rates and weak capital markets have conspired to dim its earnings prospects this year, leading to slower-than-expected investment banking activity, continued private-equity losses and write-downs in the mortgage business, the global bank said in an Securities and Exchange Commission filing. * * * The bank's quiet disclosure late Tuesday confirms what many observers have long suspected: the current capital markets slump throws a wrench into the plans of Chase Manhattan and J.P. Morgan executives, who were counting on stronger markets to generate boost increases in trading income, investments gains and underwriting and advisory fees. "Because realization of revenue synergies from the merger was dependent upon more "normalized" markets, J.P. Morgan Chase's management anticipates that revenue synergies from the merger for full year 2001 are likely to be lower than previously estimated," the bank said, presuming merger & acquisition and equity underwriting activity don't pick up from first-quarter levels. The shortfall of revenue growth puts more pressure on expenses. Bank officials have already indicated that investment bank costs will fall below pro forma 2000 levels. Management of investment banking "is committed to taking more aggressive expense management steps than previously planned," the bank said. "This is no real surprise," said Keefe Bruyette & Woods research director David Berry in a note to clients Wednesday, spotlighting the gloomy language of the bank's first-quarter 10-Q report. Berry cut his 2001 earnings estimate by 10 cents to $3.10 a share but left his 2002 forecast and "outperform" rating unchanged. But J.P. Morgan Chase's problems extend beyond just investment banking. In the filing, management noted that returns from private equity, mortgage banking and treasury & securities processing services are also expected to suffer. JPMorgan Partners, the private equity arm, is expected to drag down results this yeas as it has since the middle of 2000, when falling Internet and telecom stocks resulted in paper losses. This unit "may experience further unrealized losses in both the publicly-held and privately-held portions of its portfolio," the firm said. "The current environment for financings and valuation levels, particularly for tele-communications companies, may require J.P. Morgan Partners to write down such investments."<< they also said gold sucks -g-