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To: stomper who wrote (197773)	10/16/2002 8:04:34 AM
From: stomper	Read Replies (1) \| Respond to of 436258

10/16 07:39 J.P. Morgan 3rd-Qtr Profit Falls 91% on Bad Loans (Update2) By Michael Nol New York, Oct. 16 (Bloomberg) -- J.P. Morgan Chase & Co.'s third-quarter net income plunged 91 percent as the second-largest U.S. bank wrote off more loans to telecommunications companies and lost money on trading securities. Net income fell to $40 million, or 1 cent a share, from $449 million, or 22 cents, in the same period last year. J.P. Morgan will cut more than 2,000 investment banking jobs in a bid to cut annual costs by $700 million, the bank said. Chief Executive Officer William Harrison has overseen only one quarter of profit growth since he formed the bank through a merger two years ago. The world's biggest arranger of syndicated loans has been hit by Enron Corp.'s collapse, Argentina's debt default and the collapse of telecommunications and cable companies. Investment banking revenue also has dropped amid a global decline in initial share sales and mergers business. ''For this bank to prosper, it needs either a massive restructuring or improvement in the capital markets and in the part of the economy driven by corporate spending,'' said Tim Ghriskey, president of Ghriskey Capital Partners LLC, which sold all of its J.P. Morgan shares a year ago. The bank wrote off $834 million of bad loans to companies in the third quarter, more than quadruple the amount of a year ago. J.P. Morgan said in a statement that the jobs cuts and other moves to reduce expenses in its investment bank will cost it about $300 million in the fourth quarter and a further $150 million after that. J.P. Morgan Chase's investment bank lost $256 million as trading revenue plunged 68 percent from a year earlier to $365 million. Some of J.P. Morgan's rivals, such as Goldman Sachs Group Inc. and Citigroup Inc.'s Salomon Smith Barney unit, benefited from gains in fixed-income and bond trading in their third quarters. J.P. Morgan's investment bank, led by former BankAmerica Corp. Chief Executive David Coulter, also has suffered amid a 31 percent decline in global mergers and acquisitions this year, and the slowest U.S. IPO market in 25 years. Investment banking fees fell 34 percent to $533 million in the quarter. The bank last month said results would fall ''well below'' the 58 cents a share in operating profit earned in the second quarter.