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When an entire financial system is saved by the state, no bank can claim to have had a “good crisis”. Still, JPMorgan was less reckless than most and kept its head – picking up Bear Stearns and Washington Mutual for peanuts. Notwithstanding the odd billion dollars of one-off trading gains, JPMorgan will continue to glow after Wednesday’d third-quarter results. Net profits jumped by a third versus the previous bumper quarter, dragging shares 3 per cent higher.

But it is easy to paint a greyer picture. JPMorgan’s fundamental problem is an overexposure to arguably one of the big themes of the next decade: the de-leveraging of western households and companies after years of over-extension. This process can already be seen in the numbers. Apart from investment banking, a corporate unit boosted by trading funnies and a bounce in markets that flattered asset management, pre-provision profits fell in every other division compared with last quarter. Anything to do with lending to consumers or companies, by JPMorgan’s own admission, looks grim indeed. Another $2bn was added to consumer credit reserves.

Total retail loans outstanding fell 3 per cent. Mortgage lending is down as are outstandings on credit cards – customers are spending less on their plastic too. Loans to companies are also lower, and when asked why on the conference call, JPMorgan’s chief financial officer said “demand”. The bank should not expect retail and corporate clients to rebound any time soon. To be fair to the bank, it doesn’t sound like it does.

JPMorgan, therefore, is running on one leg. Luckily, it is a strong one. Better balance, however, will not be found in the west – consumer banking in developed markets has had its day. The truth is that JPMorgan must sprout a retail leg in the emerging markets. Just how is the number one question.

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