JPMorgan Chase on Wednesday reported record quarterly and annual earnings and revenue, cementing the company’s status as the largest and most profitable bank in US history.
Here’s what the company reported:
- Earnings: $4.81 per share vs LSEG’s $4.11 estimate
- Income: $43.74 billion vs. $41.73 billion expected
The bank said profit rose 50% to $14 billion in the fourth quarter as noninterest expenses fell 7% from a year earlier, when the company had $2.9 billion in FDIC assessment related to the bankruptcy of regional banks.
Revenue rose 10% to $43.74 billion, helped by Wall Street operations and better-than-expected net interest income of $23.47 billion, beating StreetAccount estimates by nearly $400 million.
The bank’s shares rose 1.1% in morning trading.
JPMorgan was already the largest US bank by assets when it won the auction for download First Republic emerged from the bankruptcy administration of the Federal Deposit Insurance Corp. 2023. So while it paid the largest FDIC assessment of its peers a year ago to prop up the deposit insurance fund, it was also the main beneficiary of the regional banking crisis, getting even more deposits and assets in disarray.
Fixed income trading revenue jumped 20% to $5 billion, beating StreetAcount’s estimate of $4.42 billion on rising credit and currency results. Equity revenue climbed 22% to $2 billion, missing estimates of $2.37 billion insufficiently successful the company’s competitors in Goldman Sachs.
Investment banking fees jumped 49% to $2.48 billion, beating estimates of $2.39 billion.
CEO Jamie Dimon said in a statement that the economy is “resilient,” buoyed by low unemployment and healthy consumer spending, as well as optimism for the Trump administration’s growth plan.
“However, two significant risks remain,” Dimon said. “Current and future spending demands are likely to be inflationary, so inflation could persist for some time. Additionally, geopolitical conditions remain the most dangerous and complex since World War II. As always, we hope for the best, but we are preparing the company for a wide range of scenarios. “
Speaking to reporters, CFO Jeremy Barnum said net interest income for 2025 will be about $94 billion.
Banks ended the year with several reasons to grow: Wall Street activity picked up at the same time as Main Street consumers remained resilient, while the election victory Donald Trump led to hopes for regulatory relief.
As the deal moves forward, analysts are likely to ask Dimon about his succession planning after his No. 2 director, Daniel Pinto, said he stepping back as chief operating officer in June. Dimon signaled last year that he would likely step down as CEO within five years.
Another question is how the changing outlook for Federal Reserve interest rate cuts will affect the bank in its overall operations. While Fed officials expect two more cuts this year, economic indicators could cause that to happen break.
Ultimately, analysts could press JPMorgan on what it intends to do with a possible capital windfall if Trump’s regulators present gentler version of Basel 3 Endgame, as supported by potential candidates. Dimon said last May that stock buybacks would be muted because the stock was expensivebut since then they have only climbed.
In addition to JPMorgan, Goldman SachsWells Fargo and Citigroup quarterly and annual results were also published on Wednesday, doc Bank of America and Morgan Stanley are due to report on Thursday.