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J.P. Morgan & Co. reported a $1.8 billion loss for the third quarter, which was expected following the company's recently announced $2 billion increase in reserves for loan losses to lesser developed countries.
Morgan's loss, which amounted to $9.92 per share, compares with net income of $233.6 million, or $1.25 per share, in the third quarter of 1988.
Despite the expectation of a huge loss, analysts were disappointed by two continuing trends in the financial results: a declining net-interest margin and rising operating expenses. "The story is the one we've seen over the last few quarters," said Raphael Soifer, bank analyst at Brown Brothers Harriman & Co. Morgan's third-quarter margin was 1.39%, down from 1.99% in the year-earlier quarter and down from 1.63% in the first and second quarters of this year. The narrower margin hurt net interest income, which...