Publish date:

Chase Beats Expectations as Income Surges 16%

Investment banking fees jumped 104% to $648 million following the acquisition of Hambrecht & Quist.

Chase Manhattan

(CMB)

, the second-largest U.S. banking company, said on Wednesday that its first-quarter net income surged 16%, breezing by analysts' expectations.

For the first quarter, net income rose to $1.36 billion, or $1.59 a diluted share, from $1.17 billion, or $1.32 a share, a year earlier. Wall Street had expected Chase to earn $1.55 a share, according to a survey by

First Call/Thomson Financial

.

Chase finished down 2 1/2, or 3.1%, at 78.

The New York-based bank, which has more than $391 billion in assets, has benefited from the stock market's surge, which has boosted the amount of revenues derived from trading and investment banking activity.

TheStreet Recommends

Total trading revenue rose 25% to $1.05 billion while investment banking fees jumped 104% to $648 million following the acquisition of

Hambrecht & Quist

, a West Coast investment bank.

"Revenues reflect strong underwriting fees at

Chase H&Q

, a doubling of the amount of merger and acquisition advisory fees compared to the first quarter of 1999, and a 39% increase in syndication fees," the company said in a statement. "On a pro forma basis, if Chase had owned Hambrecht & Quist since the beginning of 1999, the growth rate of investment banking fees would have been 69%, when compared to the first quarter of 1999."

Private equity investment gains were up 54% from a year ago to $500 million but down from $1.31 billion in the fourth quarter of 1999. Global private banking revenues were up 58% from the year ago to $331 million.

The return on shareholder equity for the year was 24%.

Chase repurchased $675 million of common stock in the quarter.