JPMorgan's profits hit record high as bank's massive scale pays off
JPMorgan Chase & Co. on Wednesday reported record quarterly and annual profits and revenue, solidifying the company's position as the largest and most profitable bank in U.S. history.
Here's what the company reports:
- income: $4.81 per share vs. LSEG estimate of $4.11 per share
- income: US$43.74 billion, expected US$41.73 billion
The bank said fourth-quarter profit rose 50% to $14 billion as noninterest expenses fell 7% year over year, when the company was subject to a $2.9 billion FDIC assessment due to regional bank failures.
Revenue rose 10% to $43.74 billion, nearly $400 million above StreetAccount's forecast, helped by Wall Street business and better-than-expected net interest income of $23.47 billion.
The bank's shares were up 1.1% in early trading.
JPMorgan Chase was already the largest U.S. bank by assets when it won the FDIC auction in 2023 to take over First Republic Bank. So even though JPMorgan paid the largest FDIC assessment among its peers a year ago to shore up deposit insurance, the fund was also a major winner from the regional banking crisis, picking up more deposits and assets amid the turmoil.
Fixed-income trading revenue jumped 20% to $5 billion, beating StreetAcount's forecast of $4.42 billion for rising credit and currency results. Equity revenue rose 22% to $2 billion, missing estimates of $2.37 billion and underperforming the company's rival Goldman Sachs.
Investment banking fees jumped 49% to $2.48 billion, beating estimates of $2.39 billion.
Chief Executive Officer Jamie Dimon said in a news release that the economy is “resilient,” driven by low unemployment and healthy consumer spending, as well as optimism about the Trump administration's pro-growth agenda.
“However, two significant risks remain,” Dimon said. “Current and future spending needs are likely to fuel inflation, so inflation is likely to persist for some time. In addition, geopolitical conditions remain the most dangerous and complex since World War II. As always, we hope for the best but leave it up to companies to Be prepared for any situation.”
Chief Financial Officer Jeremy Barnum said in a phone interview with reporters that net interest income in 2025 will be about $94 billion.
The banking sector has several reasons to be bullish at the end of the year: Wall Street activity has picked up while Main Street consumers remain resilient, and Donald Trump's election victory has raised hopes of loosening regulations.
While business is booming, analysts are likely to ask about Dimon's succession plan after his No. 2 executive, Daniel Pinto, said he would step down as chief operating officer in June. Dimon said last year that he might step down as CEO within five years.
Another question is how the changing outlook for the Fed to cut interest rates will affect the bank's overall business. Although Fed officials expect two more rate cuts this year, economic indicators may lead to a pause in rate cuts.
Finally, analysts are likely to pressure JPMorgan to understand what it plans to do if Trump regulators propose a softer version of Basel 3 endgame, as the potential nominee has backed. Deal with possible windfalls. Dimon said last May that share buybacks would be curbed because the stock price was expensive, but shares have been climbing since then.
In addition to JPMorgan, Goldman Sachs, Wells Fargo and Citigroup are also due to report quarterly and full-year results on Wednesday, while Bank of America and Morgan Stanley report on Thursday.