JPMorgan Chase The bank reported better-than-expected fourth-quarter results on Tuesday, thanks to better-than-expected revenue from the bank’s trading operations.
Here’s what the company reported:
- Adjusted earnings: $5.23 per share versus LSEG’s $5 consensus estimate
- Income: 46.77 billion dollars against 46.201 billion dollars expected by the LSEG
The company said its profit fell 7% to $13.03 billion, or $4.63 per share, due to a pre-announced reserve of $2.2 billion related to its purchase of Apple Card loan portfolio from Goldman Sachs. Excluding the 60 cents per share resulting from this transaction, adjusted earnings came to $5.23 and exceeded analysts’ expectations.
The company’s revenue rose 7% to $46.77 billion, while net interest income also rose 7% to $25.1 billion, roughly in line with analyst expectations for NII, according to StreetAccount.
Equity trading revenue jumped 40% to $2.9 billion, about $350 million more than analysts expected, with the company citing strong operations, particularly in its hedge fund management business. Fixed-income trading revenue rose 7% to $5.4 billion, about $110 million more than expected, according to StreetAccount.
The investment bank looked disappointing, however, as fees fell 5% to $2.3 billion, about $210 million below StreetAccount’s estimate.
The bank’s shares were down 3% in morning trading.
Banks have experienced a Goldilocks-like environment in recent quarters, with a rebound in Wall Street trading, falling interest rates, stable consumer credit and deregulation providing a boost to the sector. High inventory levels also supported banks’ wealth management divisions.
THE KBW Bank Index soared 29% last year, the second year in a row that the big bank benchmark index outpaced the gains of the S&P500.
“Potential dangers”
In his remarks in the earnings release, JPMorgan Chase CEO Jamie Dimon called the U.S. economy resilient.
“Even though labor markets have eased, conditions do not appear to be worsening. Meanwhile, consumers continue to spend and businesses generally remain healthy,” Mr. Dimon said.
“These conditions could persist for some time, particularly with ongoing fiscal stimulus, the benefits of deregulation and recent monetary policy from the Fed,” he said. “However, as usual, we remain vigilant and markets appear to be underestimating potential dangers, including those related to complex geopolitical conditions, the risk of persistent inflation and high asset prices.”
The bank said it expects full-year 2026 net interest income of about $103 billion and adjusted expenses of about $105 billion, although both metrics are “market dependent.”
Analysts will be keen to know how much of the banking momentum of 2025 is expected to continue this year. Of particular concern is whether there are cracks in spending amid signs of a possible weakening labor market, as well as indications about the strength of negotiations on Wall Street.
Bank of America, Citi Group And Wells Fargo should report their results on Wednesday, with Goldman Sachs And Morgan Stanley report Thursday.
