Deals wrap: JPMorgan surprises

A sign is seen outside the JPMorgan office in Los Angeles, California, October 12, 2010. REUTERS/Lucy NicholsonJPMorgan reports higher-than-expected quarterly earnings, helped by narrowing losses on bad loans that allowed it to release $2 billion in reserves.

JPMorgan CEO Jamie Dimon reckons the bank will generate up to $50 billion in excess capital over the next three years. The veteran dealmaker should resist the temptation to go on a spending spree, writes Breakingviews columnist Antony Currie.

Sanofi-Aventis hopes to reach a takeover deal that would value Genzyme at around $76 per share, or some $20 billion, the French newspaper Le Figaro said.

A wave of split-offs could bolster what many already expect to be a big comeback in deal activity – fueled by cheap debt and record cash piles — this year.

“Hedge funds are crowding into more of the same trades these days, amplifying market swings during crises and unnerving investors,” the WSJ reports.

from Breakingviews:

Dimon should keep JPMorgan’s powder dry for now

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

NEW YORK -- Jamie Dimon faces a luxury problem. The boss of JPMorgan, which reports earnings Friday, reckons the bank will generate up to $50 billion in excess capital over the next three years. The question is what should he do with such a windfall?

He already hopes to reinstate the dividend, cut during the financial crisis, and may even buy back shares, if regulators allow. But the veteran dealmaker must be sorely tempted to go on a spending spree. Analysts are already talking up the benefits of acquisitions both at home and abroad. But holding fire makes more sense.

That’s Mr. Geithner to you, Jamie…

USA/CEO-SURVEY“Dear Timmy, we are happy to be able to pay back the $25 billion you lent us. We hope you enjoyed the experience as much as we did.”

That’s JPMorgan ChUSA-CHINA/GEITHNERase CEO Jamie Dimon’s biting sense of humor on display yesterday as he read a  mock letter to U.S. Treasury Secretary Timothy Geithner before the Annual NYU International Hospitality Industry Investment Conference in New York. Dimon’s sarcastic tone shocked some participants and cheered others, according to sources who attended the meeting.

“I congratulate him not only for his candor but for his wit,” said Mark Grant, managing director of structured finance at Southwest Securities in Dallas. “The fact that Jamie Dimon had the self composure, the sense of humor and the fortitude to make such a statement in public not only made me smile but it reminded me of days seemingly long past when men stood up on their own two feet and played the Great Game with style.”

Dimon: never say never

Jamie DimonJPMorgan’s Jamie Dimon may have enough on his plate – for now.

With the bank still digesting its two major purchases from last year — Washington Mutual’s banking operations and Bear Stearns — Dimon seems ready to take a break from deals and focus on integration.  

A worsening economy is also keeping the industry on edge. “Common sense tells you it will get worse and we should prepare for that,” Dimon said on a conference call after the bank announced lower fourth-quarter profit. He said 7.5 percent to 8 percent unemployment is “the minimum we’ll see.”

JPMorgan is “not out there looking” for an acquisition. And there is nothing that the bank is looking to divest, Dimon said.