JP Morgan says it is "solidly profitable"
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JP Morgan Chase has cut its quarterly dividend by 87%, from 38 cents to 5 cents per share.
The decision should save the bank $5bn (�3.5bn) over a year.
JP Morgan says the decision is not directly related to the $25bn it borrowed from the government's Troubled Asset Relief Program (Tarp).
But it said that it would be able to pay off the loan faster and described the decision as displaying an "abundance of caution".
The bank added that it was currently "solidly profitable" and that it expected results for the current three-month period to be in line with market expectations.
It reported a profit of $702m for the last three months of 2008, down from $3bn a year earlier.
JP Morgan bought most of the assets of failed lender Washington Mutual for $1.9bn last year. It also bought struggling Bear Stearns last May.
JP Morgan has generally been seen as weathering the credit crunch better than its peers.
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