US bank earnings increase: JP Morgan and Bear Stearns figures surprise analysts

EARLY results from Wall Street banks for the final quarter of 1993 suggest their strong earnings record continued to the end of the year.

Figures from both JP Morgan and Bear Stearns surprised analysts yesterday, while Citicorp said it would post record annual earnings of dollars 2.2bn when it announces its figures next week, despite final-quarter restructuring charges.

JP Morgan - which will be displaced by the larger Citicorp as America's most profitable bank - reported flat net income for the year, earning dollars 1.59bn after charges compared with dollars 1.58bn for 1992.

But in the fourth quarter, its earnings increased by almost 80 per cent, to dollars 392m, or dollars 1.92 a share - from dollars 221m, or dollars 1.10 a share. Wall Street, which had been expecting profits of dollars 1.70 a share, reacted by pushing up Morgan's share price dollars 5 8 to dollars 70 1/4 .

Bear Stearns said sharply higher investment banking revenues helped it double its second-quarter profit to dollars 1bn, or dollars 1.05 a share, compared with dollars 632m or 52 cents a share in the final three months of the year before. Securities analysts had predicted earnings of about 78 cents a share.

Investment banking revenues were up 180 per cent, while trading revenues increased by 58 per cent.

Citicorp's results, which will include fourth-quarter profits of about dollars 575m, mark the end of the bank's long turnaround from disastrous commercial-property lending in the late 1980s.

'The results from our core businesses will not only be at a record level but are also broad-based,' said John Reed, chief executive.

The fourth-quarter results will include restructuring charges of dollars 425m, as well a write-down of dollars 179m in connection with the sale of Quotron, its market-data service, to Reuters.