Washington  - JP Morgan Chase, the largest US banker by market value, Thursday reported second-quarter earnings that were higher than expected by financial analysts.

The bank's net income fell 53 per cent to 2 billion dollars, or 54 cents per share. Analysts had predicted 44 cents, Bloomberg financial news agency reported.

"Our earnings were down significantly due to the unfavourable credit environment and market conditions," said CEO Jamie Dimon.

"Our expectation is for the economic environment to continue to be weak - and to likely get weaker - and for the capital markets to remain under stress," his statement said.

The bank's second-quarter earnings were cut by 540 million dollars as a result of the takeover of US securities firm Bear Stearns, which JP Morgan agreed to buy in March. It will retain 7,000 of Bear Stearns' 14,000 employees. (dpa)