NEW YORK Jan 15 (Reuters) - JPMorgan Chase & Co (JPM.N) said on Thursday strong commodities performance cushioned its dive in fourth-quarter profit, although it sharply cut risk in the sector as oil, metals and grains prices slumped.
JPMorgan's value-at-risk in commodities -- or the maximum it could potentially lose in trading commodities in a day -- fell 28 percent to $30 million during the quarter ended Dec. 31, from $41 million in the previous quarter.
JPMorgan did not give a breakdown for its commodities earnings.
But its financial results showed commodities were the only area where the bank had cut risks in the fourth quarter. VaR for other businesses, such as fixed income, foreign exchange and equities, were up from the third quarter.
JPMorgan posted a fourth-quarter net profit of $702 million, or 7 cents per share, down from $3 billion, or 86 cents per share, a year earlier. The bank said it was aided by "strong performance" in commodities and emerging markets, aside from record earnings in interest rates and currencies trading.
Chief Executive Jamie Dimon told a conference call after the results that JPMorgan was hiring in Asia and expanding pockets of its investment business, including commodities.
JPMorgan is the third major U.S. bank to announce a slash in commodities risk during the fourth quarter as prices of oil, metals and grains ended 2008 substantially lower from record highs earlier in the year.
Goldman Sachs (GS.N) cut its commodities VaR by 25 percent in the fourth quarter, while Morgan Stanley (MS.N) pared its risk in the business by 22 percent. (Reporting by Barani Krishnan; Editing by Walter Bagley)