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JPMorgan profit up, but questions loom

JPMorgan Chase & Co. reported tepid corporate loan growth in the first quarter, raising questions about the banking industry’s ability to boost profit in coming years.

JPMorgan Chase & Co. reported tepid corporate loan growth in the first quarter, raising questions about the banking industry’s ability to boost profit in coming years.

First-quarter earnings rose by two-thirds, but that increase came mainly from a drastic cut in the amount of money set aside for bad loans, a move that could be difficult to repeat over the long term.

The bank’s book of consumer loans shrank 10 percent in the quarter, and loans to corporate customers did not increase enough to make up for that. The No. 2 U.S. bank also took $1.75 billion of charges linked to collecting payments on bad mortgages and foreclosures, and said an upcoming settlement with regulators over mortgage servicing abuses could force it to hire as many 3,000 people.

The quarterly results were the first from a major Wall Street bank. They beat expectations but raised concerns about lending profits, and bank shares broadly edged lower.

“Assets in the industry are stagnant at best,” said investment officer Malcolm Polley.

 
 
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