JP Morgan has ushered in the Trump era by smashing expectations

Emma Haslett
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U.S. Banks Post Near-Record Profits In Second Quarter Of 2014
So far, so good for JP Morgan in the Trump era. (Source: Getty)

JP Morgan smashed expectations in the fourth quarter, reporting adjusted earnings per share of $1.71 on forecasts of $1.43.

The figures

Revenues rose to $24.3bn in the fourth quarter, five per cent lower than the $25.5bn it brought in during the previous quarter - but two per cent up on the $23.7bn it made in the fourth quarter of last year.

Its investment banking arm took a hit, with net revenues falling 11 per cent on the previous quarter to $8.4bn - although it was up on the year before, by 20 per cent (thanks, no doubt, to the trading bonanza brought on by the outcome of the US election).

Meanwhile, consumer banking was down three per cent on the previous quarter, at $11bn, while its commercial banking arm rose five per cent to $1.9bn.

Staff costs made up most of its $744m expenses, it said - although that was down one per cent on the previous year.

The lender said it had returned $3.8bn to shareholders in the fourth quarter, with $2.1bn of net repurchases and a common dividend of $0.48 per share.

Shares edged up 0.3 per cent in pre-market trading.

Why it's interesting

US lenders are in a good mood at the moment, with Donald Trump expected to make things a lot more comfortable for them when he comes in.

The much-maligned Dodd Frank act, designed to prevent a recurrence of the financial crisis by limiting which banks can trade in what, is on the block. Although JP Morgan boss Jamie Dimon (who reportedly politely declined Trump's offer of a job as treasury secretary) has asked for it to be kept, largely because of the amount the lender has spend complying with it.

The good news was that the lender spent less money fighting legal claims this year - noninterest expense fell to $13.8bn, down three per cent, which it attributed to a fall in legal expenses. And its provision for credit losses fell from $1.3bn to $864m.

JP Morgan wasn't the only lender to report stonking results today: Bank of America also beat estimates, with earnings per share of $0.40.

What JP Morgan said

Dimon said:

The US economy may be building momentum. Looking ahead there is opportunity for good, rational and thoughtful policy decisions to be implemented, which would spur growth, create jobs for Americans across the income spectrum and help communities, and we are well positioned to play our part. Business plays a critical positive role in society, and in collaboration with nonprofits, governments and educational institutions, it can help strengthen our economy and our country.

In short

An impressive performance for one of Wall Street's largest lenders

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