NEW YORK (Reuters) – JPMorgan Chase & Co reported a greater-than-expected 47 percent increase in quarterly earnings and struck an upbeat tone that lifted the shares of major U.S. banks reporting next week.

JPMorgan executives said loan demand and trading profit could grow this year, boosting investor optimism that revenue for other major banks will recover.

The bank’s shares rose 2.2 percent to $45.42, their highest since April, and they were one of the the biggest percentage gainers on the Dow Jones industrial average an hour before the close of the market.

Profit and revenue were stronger than analysts had expected, even though the bank boosted earnings by 30 cents a share by releasing $2 billion of reserves previously set aside to cover credit card losses.

Wall Street broadly interpreted the results as indicating underlying strength, but some critics questioned whether the release of reserves distracted investors from the still-difficult economic circumstances weighing on the bank’s main consumer business.

JPMorgan is also still wrestling with the aftermath of the mortgage crisis and put aside another $1.5 billion to cover legal settlements mainly linked to U.S. home loan foreclosures.

Chief Executive Jamie Dimon set a positive tone on a call with analysts. JPMorgan could start to increase its dividend, which the bank trimmed to an annual 20 cents during the crisis, to about 75 cents to $1 a year once regulators give the go-ahead, likely at the end of March, he said.

NEW YORK (Reuters) – JPMorgan Chase & Co (JPM.N: Quote, Profile, Research) reported a 47 percent increase in quarterly earnings, but much of the gain came from dipping into money previously set aside to cover bad loans.

The gradually recovering U.S. economy is allowing JPMorgan to keep less money on hand for loan losses. Profit and revenue was stronger than analysts had expected, and the bank made more loans.

But JPMorgan is still wrestling with the aftermath of the mortgage crisis — it set aside another $1.5 billion (945.3 million pounds) to cover legal settlements mainly linked to U.S. home loan foreclosures.

“Hopefully it’s going to be a good year,” said JPMorgan Chief Executive Jamie Dimon on a conference call with journalists, adding that the economy looks better now than it did 12 months ago.

JPMorgan shares rose 10 cents to $44.55 in early trading on the New York Stock Exchange.

Analysts said the results could indicate headwinds for major banks reporting next week. The largest U.S. bank, Bank of America Corp (BAC.N: Quote, Profile, Research), reports on Friday January 19, while Citigroup (C.N: Quote, Profile, Research), the third largest, reports on Tuesday. Goldman Sachs Group (GS.N: Quote, Profile, Research) reports on Wednesday.

JPMorgan said profit increased to $4.8 billion, or $1.12 a share, from $3.3 billion, or 74 cents a share, a year earlier. Analysts on average expected $1 a share, according to Thomson Reuters I/B/E/S.

NEW YORK (Reuters) – JPMorgan Chase & Co reported a 47 percent increase in quarterly earnings, but much of the gain came from dipping into money previously set aside to cover bad loans.

The gradually recovering U.S. economy is allowing JPMorgan to keep less money on hand for loan losses. Profit and revenue was stronger than analysts had expected, and the bank made more loans.

But JPMorgan is still wrestling with the aftermath of the mortgage crisis — it set aside another $1.5 billion to cover legal settlements mainly linked to U.S. home loan foreclosures.

“Hopefully it’s going to be a good year,” said JPMorgan Chief Executive Jamie Dimon on a conference call with journalists, adding that the economy looks better now than it did 12 months ago.

JPMorgan shares rose 10 cents to $44.55 in early trading on the New York Stock Exchange.

Analysts said the results could indicate headwinds for major banks reporting next week. The largest U.S. bank, Bank of America Corp, reports on Friday January 19, while Citigroup, the third largest, reports on Tuesday. Goldman Sachs Group reports on Wednesday.

JPMorgan said profit increased to $4.8 billion, or $1.12 a share, from $3.3 billion, or 74 cents a share, a year earlier. Analysts on average expected $1 a share, according to Thomson Reuters I/B/E/S.

NEW YORK (Reuters) – JPMorgan Chase & Co reported a 47 percent increase in quarterly earnings, but much of the gain came from dipping into money previously set aside to cover bad loans.

The gradually recovering U.S. economy is allowing JPMorgan to keep less money on hand for loan losses. Profit and revenue was stronger than analysts had expected, and the bank made more loans.

But JPMorgan is still wrestling with the aftermath of the mortgage crisis — it set aside another $1.5 billion to cover legal settlements mainly linked to U.S. home loan foreclosures.

“Hopefully it’s going to be a good year,” said JPMorgan Chief Executive Jamie Dimon on a conference call with journalists, adding that the economy looks better now than it did 12 months ago.

JPMorgan shares rose 10 cents to $44.55 in early trading on the New York Stock Exchange.

Analysts said the results could indicate headwinds for major banks reporting next week. The largest U.S. bank, Bank of America Corp, reports on Friday January 19, while Citigroup, the third largest, reports on Tuesday. Goldman Sachs Group reports on Wednesday.

JPMorgan said profit increased to $4.8 billion, or $1.12 a share, from $3.3 billion, or 74 cents a share, a year earlier. Analysts on average expected $1 a share, according to Thomson Reuters I/B/E/S.

WASHINGTON/NEW YORK, Dec 30 (Reuters) – The U.S. Treasury Department converted $5.5 billion of its preferred shares in Ally Financial, the lender once known as GMAC, into common stock, laying the groundwork for exiting the investment.

Ally, which hopes to go public next year and has been working to clean up its balance sheet, was buffeted by losses on mortgages and other loans amid the financial crisis and received more than $17 billion in several rounds of government cash injections.

The move to convert almost half of the Treasury’s preferred stock, a year after Ally received its last government cash injection, is “designed to accelerate Treasury’s ability to exit its investment in the company,” the department said in a statement on Thursday.

It will take the government’s common stock ownership of the firm to 74 percent, up from 56 percent.

For Ally, the conversion is important because it boosts the lender’s tier one capital — an important measure of capital strength — and brings it in line with its peers, a senior Treasury official said.

That should help the company attract outside investment, he added.

By converting some of its preferred stock in Ally, the Treasury is following the path it laid when selling its stakes in other bailed out companies, including Citigroup (C.N: Quote, Profile, Research, Stock Buzz).

NEW YORK (Reuters) – From Wall Street to the City of London to Hong Kong’s Central District, bankers are bracing for bonuses to be down 7 percent on average from a year ago, and higher salaries will only partially cushion the hit, a Reuters/IFR global poll shows.

Some finance industry professionals are expecting drops as steep as 30 percent after weak trading results that are depressing bank profits and shrinking the bonus pool, according to the poll of more than 25 professionals.

Unlike in other industries, bankers typically rely on year-end bonuses for a large portion of their yearly compensation.

Although most banks have not yet informed staff of their actual bonuses for 2010, the dismal expectations reflect the fact that generally bankers, traders, and salespeople have been told to be ready for a low payout.

“Flat is the new up,” one U.S. banker said.

A London-based investment banking analyst said, “You would have to live in cuckoo land to expect bonuses to be up on last year. Even if you’re a star performer you’re going to be down.”

This is a sharp turnaround from last year, when Wall Street bonuses jumped 17 percent on average, according to a report by New York State’s comptroller.

NEW YORK (Reuters) – From Wall Street to the City of London to Hong Kong’s Central District, bankers are bracing for bonuses to be down 7 percent on average from a year ago, and higher salaries will only partially cushion the hit, a Reuters/IFR global poll shows.

Some finance industry professionals are expecting drops as steep as 30 percent after weak trading results that are depressing bank profits and shrinking the bonus pool, according to the poll of more than 25 professionals.

Unlike in other industries, bankers typically rely on year-end bonuses for a large portion of their yearly compensation.

Although most banks have not yet informed staff of their actual bonuses for 2010, the dismal expectations reflect the fact that generally bankers, traders, and salespeople have been told to be ready for a low payout.

“Flat is the new up,” one U.S. banker said.

A London-based investment banking analyst said, “You would have to live in cuckoo land to expect bonuses to be up on last year. Even if you’re a star performer you’re going to be down.”

This is a sharp turnaround from last year, when Wall Street bonuses jumped 17 percent on average, according to a report by New York State’s comptroller.

NEW YORK, Dec 21 (Reuters) – From Wall Street to the City of London to Hong Kong’s Central District, bankers are bracing for bonuses to be down 7 percent on average from a year ago, and higher salaries will only partially cushion the hit, a Reuters/IFR global poll shows.

Some finance industry professionals are expecting drops as steep as 30 percent after weak trading results that are depressing bank profits and shrinking the bonus pool, according to the poll of more than 25 professionals.

Unlike in other industries, bankers typically rely on year-end bonuses for a large portion of their yearly compensation.

Although most banks have not yet informed staff of their actual bonuses for 2010, the dismal expectations reflect the fact that generally bankers, traders, and salespeople have been told to be ready for a low payout.

“Flat is the new up,” one U.S. banker said.

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Graphic on bank bonuses globally in 2010

NEW YORK (Reuters) – From Wall Street to the City of London to Hong Kong’s Central District, bankers are bracing for bonuses to be down 7 percent on average from a year ago, and higher salaries will only partially cushion the hit, a Reuters/IFR global poll shows.

Some finance industry professionals are expecting drops as steep as 30 percent after weak trading results that are depressing bank profits and shrinking the bonus pool, according to the poll of more than 25 professionals.

Unlike in other industries, bankers typically rely on year-end bonuses for a large portion of their yearly compensation.

Although most banks have not yet informed staff of their actual bonuses for 2010, the dismal expectations reflect the fact that generally bankers, traders, and salespeople have been told to be ready for a low payout.

“Flat is the new up,” one U.S. banker said.

A London-based investment banking analyst said, “You would have to live in cuckoo land to expect bonuses to be up on last year. Even if you’re a star performer you’re going to be down.”

This is a sharp turnaround from last year, when Wall Street bonuses jumped 17 percent on average, according to a report by New York State’s comptroller.

NEW YORK (Reuters) – From Wall Street to the City of London to Hong Kong’s Central District, bankers are bracing for bonuses to be down 7 percent on average from a year ago, and higher salaries will only partially cushion the hit, a Reuters/IFR global poll shows.

Some finance industry professionals are expecting drops as steep as 30 percent after weak trading results that are depressing bank profits and shrinking the bonus pool, according to the poll of more than 25 professionals.

Unlike in other industries, bankers typically rely on year-end bonuses for a large portion of their yearly compensation.

Although most banks have not yet informed staff of their actual bonuses for 2010, the dismal expectations reflect the fact that generally bankers, traders, and salespeople have been told to be ready for a low payout.

“Flat is the new up,” one U.S. banker said.

A London-based investment banking analyst said, “You would have to live in cuckoo land to expect bonuses to be up on last year. Even if you’re a star performer you’re going to be down.”

This is a sharp turnaround from last year, when Wall Street bonuses jumped 17 percent on average, according to a report by New York State’s comptroller.