Banking giant JPMorgan Chase posted strong first-quarter earnings, resulting in a strengthened fortress balance sheet, with estimated Basel III Tier I common ratios of 8.9% at the end of the first quarter, up from 8.7% in the fourth quarter.
As a result, the company is ahead of Basel III requirements, keeping in line with the vision of mortgage banking CEO Kevin Watters, who sees the firm progressing in every possible way.
Watters, who was HousingWire’s cover story for March, is striving for investors to receive the best customer satisfaction from any of the Wall Street banks. The Bank of International Settlements oversee the voluntary implementation of Basel III. In a report to G20 finance ministers, the Basel Committee on Banking Supervision said "full, timely and consistent implementation of Basel III remains fundamental to building a resilient financial system, maintaining public confidence in regulatory ratios and providing a level playing field for internationally active banks."
Nonetheless, performance in other areas of the financial firm are not coming along as well. The mortgage banking segment of JPMorgan was softer in Q1, with net revenue declining by $671 million from last year, reaching $2.7 billion.
Nonetheless, JPMorgan ended the first quarter with Basel I Tier 1 common capital of $143 billion and a resulting ratio of 10.2%, including the impact of the Basel 2.5 rules that became effective at the beginning of this year.
"We are pleased that our capital strength and earnings power will allow the firm to return excess capital to shareholders," said Jamie Dimon, chairman and chief executive officer of JPMorgan.
He added, "We are also doing our part to support economic recovery, providing credit and raising capital totaling $480 billion for our clients in the first quarter."
The Tier 1 common ratio under both Basel I and Basel III are non-generally accepted accounting principal financial measures. These measures are used by management, bank regulators, investors and analysts to assess JPMorgan’s capital position and to compare the company’s capital to that of other financial services companies.