This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Deal: JPMorgan Cautious on M&A, Defensive on Dimon

NEW YORK ( TheStreet) -- A senior JPMorgan Morgan Chase & Co. executive has voiced caution on the outlook for M&A activity and defended his firm against a slew of governance issues ahead of its shareholder meeting next week.

Michael Cavanagh, the co-head of the bank's corporate and investment bank, said the firm had kicked off a solid second quarter, with trading revenue 10% to 15% ahead of the prior period but weaker than the first quarter.

The bank posted net income of $5 billion in the prior corresponding period, recent financial statements show. It topped M&A advisory tables during the first quarter, according to data provider Dealogic.

But Cavanagh said overall M&A activity had yet to rebound. "Uncertainty is still there and we have active backlogs and pipelines," he told a UBS Global Financial Services Conference in New York on Tuesday.

"Versus a year ago, the conditions for M&A are feeling better but while we had some big deals in the first quarter, we have not seen a broader pickup in the broader market," he said.

Cavanagh cited the reasons usually given for why M&A should pick up -- strong corporate cash levels and equity markets, the challenge of getting and sustaining organic growth and diminished macroeconomic uncertainties.

But, he said, "the one remaining factor is risk appetite. If you thought your way through the credit crisis you don't want to make a mistake -- so that is a counterbalance."

Yet, with all Wall Street waiting for the outcome of the bank's May 21 shareholder meeting where an advisory vote is to be taken on separating the chairman and CEO roles for JPMorgan's chief, Jamie Dimon, Cavanagh had to spend more of his talk than he might have wanted on assuaging concerns about his employer's enterprise.

The executive said risk control and compliance was a "top priority" for JPMorgan, following its $6.2 billion of trading losses from the London Whale episode, as well as an inquiry from the Federal Energy Regulatory Commission, which is alleging that the bank manipulated electricity markets.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
JPM $63.63 -0.75%
UBS $17.16 0.26%
AAPL $95.03 -2.90%
FB $117.52 7.90%
GOOG $691.20 -2.10%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs