JP Morgan hits record annual profits despite fourth quarter slowdown
JP Morgan has reported record annual profits today despite a slowdown in its trading business and rising costs biting into into fourth quarter profit margins.
Profits for the full year hit a record $48.3bn, but the final quarter of the year saw a dip to $10.4bn, a 14 per cent fall on the previous year.
Analysts had expected profits to slump further at America’s largest bank in the final quarter but the performance was lifted by a stellar performance in its investment banking division on the back of a surge in global M&A activity.
Loan growth, the bank’s core business, was also up 6% as the economy rebounded, while net interest income from lending and investments in Treasury securities was up 3%.
Jamie Dimon, chief executive of JP Morgan, said: “The economy continues to do quite well despite headwinds related to the Omicron variant, inflation and supply chain bottlenecks.
“We remain optimistic on U.S. economic growth as business sentiment is upbeat and consumers are benefiting from job and wage growth.”
The bank beat analysts expectations despite the slowdown in growth with profits of $3.33 per share beating analysts’ prediction of $3.01 per share, according to Refinitiv data.
JP Morgan’s share price slid 3% in pre-market trading and continued to fall after the opening bell to as much as 6% below their opening price.
Rivals Wells Fargo and Citigroup also both beat profit estimates after a surge in lending activity, despite seeing profits dip.
Citigroup posted a 26 per cent fall in profit in the final quarter but the bank’s performance was lifted by soaring fees in its investment banking division which helped it beat analyst estimates.
Wells Fargo revenue reached $20.86bn, topping consensus estimate of $18.82bn, while earnings per share hit $1.25 per share, sailing past analysts predicted earnings of $1.13 per share.