Left Menu
Development News Edition

UPDATE 3-JPMorgan posts record annual profit as bond trading rebounds

Reuters | Washington DC | Updated: 14-01-2020 22:07 IST | Created: 14-01-2020 21:47 IST
UPDATE 3-JPMorgan posts record annual profit as bond trading rebounds
Representative Image Image Credit: Wikipedia

JPMorgan Chase & Co posted its biggest-ever annual profit on Tuesday as its bond trading business bounced back in the last three months of the year, setting an upbeat tone for the big U.S. banks reporting this week. Revenue rose at all but one of JPMorgan's four main businesses, beating analysts' expectations and sending the bank's shares 2.2% higher. Executives were positive and clear-eyed about the outlook for 2020, as well.

"Our outlook heading into 2020 is constructive, underpinned by the strength of the U.S. consumer," said JPMorgan Chief Financial Officer Jennifer Piepszak on a call with analysts. "In spite expected slower global growth and the backdrop of geopolitical uncertainties, we remain well-positioned." Big bank rivals Citigroup and Wells Fargo also reported earnings on Tuesday. Citi beat profit estimates thanks to a jump in trading revenue and strong credit card sales, while Wells Fargo's profits slumped on a rise in legal reserves.

At JPMorgan, the only business to post a decline was commercial banking, which reported revenues fell 3% on lower net interest income and higher expenses due to investments in the business. The bank's bond trading revenue jumped 86% compared to a year earlier when financial markets were walloped industry-wide by a sell-off driven by trade and global growth concerns. Revenue from equity markets rose 15% to $1.5 billion.

Piepszak conceded that its returns in bond-trading benefited from "a favorable comparison against a challenging fourth quarter last year," but said there were examples of strength across the business. Debt underwriting fees in the investment bank rose 11 percent year over year, in part thanks to the increased activity in bond issuance which made for competitive pricing conditions, she said.

Overall revenue at JPMorgan's corporate and investment banking unit, which houses it's trading and underwriting businesses, surged 31% to $9.47 billion. The consumer and community banking business, which accounts for almost half of the bank's revenues, reported a $14 billion, or 3% rise, over last year.

Chase credit card customers used their plastic to the bank's benefit this holiday season. The bank reported credit card, merchant services, and auto revenue surged $6.3 billion or 9%, with credit card loans up 8%. But revenues were under pressure this quarter from lower deposit margins because low-interest rates meant that the bank earned less on deposits it loaned out. Home lending revenue was also down 5% to $1.3 billion.

Total loans, excluding home lending, rose 3% in the quarter. Home loans were down 17%. Deposits flowed into the consumer bank in the fourth quarter, helping to offset a decline in loans, as Chase opened around 100 new bank branches 2019 in many new cities where it previously had not been located. Deposits grew 5% compared to a year ago.

CEO Jamie Dimon said the U.S. consumer continued to be in a strong position. "Their wages are up, their assets are up, their investments are up, their home values are up," he said on a call with reporters. The bank's net income rose to $8.52 billion, or $2.57 per share, in the quarter ended Dec. 31, from $7.07 billion, or $1.98 per share, a year earlier. Net revenue rose 9% to $29.21 billion. (https://bit.ly/36Okhjg)

Analysts, on average, had expected the bank to earn $2.35 per share on revenue of $27.94 billion, according to Refinitiv data. Net interest income fell 2% to $14.3 billion.


TRENDING

OPINION / BLOG / INTERVIEW

Turbulence surrounding tobacco control in Ghana

... ...

Smart healthcare: IoT redefining the way healthcare is delivered

As the world is embracing the new wave of digitalization triggered by the pandemic and the arrival of 5G, the adoption of IoT devices will further boom. With adoption set to soar, IoT security issues and other challenges cant be ignored any...

Refugee compassion and response: Ideas to mitigate disasters now and in their future

Their homeland becomes a forbidden territory for them and more likely than not, their journey to foreign soil is no less traumatizing, not to say deadly. It is crucial to help refugees live a life of dignity and purpose....

Inadequate water infrastructure causes a tidal wave of coronavirus in rural Alaska

... ...

Videos

Latest News

EU considering stopgap measure for UK financial services post Brexit, says EU diplomat

European Union assessments of whether to grant market access for banks and other financial firms from Britain will not be completed in time for January and stop-gap measures are being considered, an EU diplomat said on Thursday. Britains un...

'Adios Diego': World says farewell to flawed hero Maradona as family seeks quick burial

Argentines lined up for hours on Thursday to say goodbye to soccer great Diego Maradona and walk past his casket lying in state at the Casa Rosada presidential palace, draped in the national flag and his famous no. 10 shirt. In Italy, crowd...

PM Modi inaugurates 3rd Global Renewable Energy Investment Meeting and Expo

Prime Minister Shri Narendra Modi inaugurated the 3rd Global Renewable Energy Investment Meeting and Expo RE-Invest 2020 through video conferencing. The summit is organised by the Ministry of New and Renewable Energy. The theme for RE-Inves...

Activists hold sit-in protest in J-K condemning Pakistan's role in 26/11 Mumbai attacks

Activists organized a sit-in protest in Jammu and Kashmir on Thursday against Pakistans role in the 2611 terrorist attacks in Mumbai in 2008, calling for an end to Islamabads policy of terrorism targeted at India. The protesters demanded th...

Give Feedback