Jamie Dimon can rightly claim the throne as the king of Wall Street’s bankers.
His JPMorgan Chase is now worth more in market value than the one-time world leader Citigroup, which ill-advisedly pushed aside then-heir apparent Dimon a decade ago.
Despite JPMorgan’s big writeoff on bad housing bets yesterday, its stock surged nearly 6 percent, propelling it to rally other Wall Street banks from their slump – and leaving battered Citigroup to fall behind to a new 52-week intraday low of $25.90 over its wrecked ledger.
Analysts said Dimon’s steady hand on the wheel instilled confidence among shareholders that JPMorgan and several other banks have put most of their bad news about junk mortgage paper on the table.
“Though the numbers were slightly weak, you have to give Jamie Dimon credit for avoiding most of the problems that have plagued his competitors,” said Thomas Russo, a partner at Gardner Russo & Gardner.
Dimon said the bank wrote down $1.3 billion for subprime-mortgage investments, less than analysts had estimated. The move immediately helped JPMorgan lower its interest costs.
However, JPMorgan is not immune to the growing problem of consumer loan woes, and set aside $2.3 billion to cover expected losses.
Dimon has outshone Citigroup across the board since his arrival at JPMorgan four years ago. Citi’s junk mortgage writeoff of $18.1 billion on Tuesday was nearly 14 times bigger than JPMorgan’s.
JPMorgan’s revenue climbed 7 percent to $17.4 billion. Full year profit rose 6 percent to $15.4 billion on record net revenue of $71.4 billion.
Investors snapped up JPMorgan shares at triple the usual daily volume, sending it up $2.26 to $41.43, and giving it a market value of $139.5 billion compared to Citi’s falling market value of $131 billion. Citi fell 2.6 percent to $26.24, down 70 cents.
Bank of America rose 81 cents to $38.69, giving it the largest market capital among diversified banks, totaling $171.7 billion.
BofA, however, has sharply retreated from traditional Wall Street banking, unloading its securities and clearing house and broker-dealer businesses to focus more on consumer banking.
Among other Wall Street banks, Lehman rose 4.2 percent to $58.06, up $2.35; Goldman Sachs gained 2.2 percent to $197.50, up $4.21; Merrill Lynch rose 4 percent to $55.09, up $2.08, and Morgan Stanley settled at $47.39, up 26 cents, or 0.6 percent.