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JPMorgan Chase earns $4.8 billion

Analysts were expecting the New York City-based bank to earn $2.8 billion during the quarter, or 67 cents a share, according to Thomson Reuters.

One of the most encouraging signs for JPMorgan was an improvement in consumer payment habits, particularly on credit cards and their mortgages.

But CEO Jamie Dimon cautioned it was not certain whether conditions would continue to get better, noting that losses in areas like home equity loans continued to remain near historic highs.

“It is too early to say how much improvement we will see from here,” said Dimon.

The improvement in credit was mitigated somewhat by weak loan demand, particularly within its business lending division. It did however allow the bank a rare opportunity to draw down some of the massive amounts of reserves it has stockpiled since the crisis began to cope with loan losses.

In total, the company said it released $1.5 billion from its reserves, providing a lift to earnings.

“You should assume we don’t like to release loan loss reserves,” Dimon said during a conference call with analysts.

That increase was partially offset though by a $550 million charge it took as a result of a tax levied on bankers earlier this year by the British government. The tax is expected to impact the U.K.-based operations of a number of big U.S. banks this quarter.

Still, many of the bank’s various business delivered strong performances. Both JPMorgan’s credit card and retail banking business each reported higher profits compared to last quarter and a year ago. And even with the recent market sell-off, earnings at the firm’s asset management business was up from 2009 as well.

One unit that did struggle was its investment banking division, as net income fell 6% to $1.4 billion from a year ago, hurt by lower stock and debt underwriting activity, a decline that Dimon partly attributed to banks fighting for deals again.

“The competition is back,” he said.

Trading revenues were also lower as a result of the recent shake-up in financial markets. That weighed on JPMorgan’s results.

Earlier this year, JPMorgan Chase, Goldman Sachs (GS, Fortune 500), Bank of America (BAC, Fortune 500) and Citigroup (C, Fortune 500) booked surprisingly strong profits as their trading desks reported profits on every single business day of the first quarter.

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