America’s largest bank saw its earnings drop by half a billion dollars over the past year after mortgage originations fell sharply.
On Tuesday JP Morgan Chase reported net income for the second quarter of $6 billion, down from $6.5 billion in the second quarter of 2013.
The US lender wrote $16.8 billion in mortgages during the June quarter, down 66 per cent from the previous year and 1 per cent from the previous quarter.
The group’s mortgage banking net income was $709 million, a decrease of $433 million from the previous year, driven by lower net revenue and a lower benefit from the provision for credit losses, partially offset by lower non-interest expense, according to a company statement.
“Despite continued industry-wide headwinds in Markets and Mortgage, the firm has continued to deliver strong underlying performance,” JP Morgan Chase chairman and chief executive James Dimon said.
“Consumer & Community Banking deposit growth and card sales volume both outpaced the industry, and we had record loan originations in Business Banking,” Mr Dimon said.
US applications for owner-occupied mortgages are roughly 15 per cent below last year’s pace, while refinance applications are almost 60 per cent slower than a year ago, according to The Mortgage Bankers Association of America.