Chase's Card Income Falls as Charge Offs Rise

JPMorgan Chase (NYSE: JPM) reported today its net income in the second quarter was $4.2 billion compared with $3.5 billion in the same period a year ago. Net managed revenues were $19.8 billion, up 25 percent from $15.8 billion in the same period a year ago.

Chase’s Card Services division recorded net income of $759 million, down 13 percent from $875 million in the second quarter of 2006. The bank said 2006’s second quarter income benefited from lower charge offs after the change in bankruptcy laws implemented in October 2005. The net charge off rate in the second quarter of 2007 was 3.62 percent, with net charge offs of $1.33 billion, compared with a charge off rate of 3.28 percent and net charge offs of $1.12 billion in the same period a year ago.

The 90 day delinquency rate was 1.42 percent, down from 1.52 percent a year ago. The 30 day delinquency rate declined to 3.00 percent this year compared with 3.14 percent a year ago.

Net revenues in the card division were $3.71 billion, up slightly from $3.68 billion a year ago. The provision for credit losses was $1.3 billion this year, up 29 percent from $1.0 billion a year ago. Chase reported card receivables of $148 billion at the end of the quarter, up $8.7 billion from the prior year.