A J.P. Morgan logo is seen in New York City, U.S. January 10, 2017. REUTERS/Stephanie Keith
NEW YORK: JPMorgan Chase & Co, the No. 1 US bank by assets, reported stronger-than-expected quarterly earnings and revenue on Friday, helped by a surge in investor activity related to the US presidential election.
The bank’s net income rose 23.8% to US$6.73bil (RM30.03bil) in the three months ended Dec 31, while earnings per share rose to US$1.71 from US$1.32. Excluding items, the bank earned US$1.58 per share, handily beating the average analyst estimate of US$1.44 per share, according to Thomson Reuters I/B/E/S.
“We grew market share in virtually all of our businesses and showed expense discipline while continuing to invest for the future,” chief executive Jamie Dimon said in a statement.
“The US economy may be building momentum,” he added. “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.”
Donald Trump’s stunning victory on Nov 8 set off a wave of trading in stocks and bonds during what is normally a slow period for trading desks at big banks.
Bank of America Corp, the second-largest US bank, kicked off the quarterly earnings period for big US lenders earlier on Friday, announcing a 46.8% rise in profit.
The banks were also reporting their first results since the Federal Reserve raised its key interest rate target for the second time since 2006 on Dec 14.
Higher interest rates are usually good for banks, allowing them to charge higher rates on loans.
Revenue from fixed-income trading - JPMorgan’s most volatile business - rose about 31% to US$3.37bil (RM15.0bil), while stock trading revenue increased 8.1% to US$1.15bil (RM5.11bil).
That helped boost total net revenue by 2.5% to US$24.33bil (RM108.17bil), beating analysts average estimate of US$23.95bil (RM106.79bil).
JPMorgan’s shares, which up to Thursday had risen about 23% since the election, were little changed in premarket trading. Bank stocks have been on a tear on the expectation that profits will be boosted by Trump’s plans to cut corporate taxes, ease regulatory restraints and boost infrastructure spending.
The Federal Reserve, which raised interest rates by 0.25 percentage point in December, is expected to raise them again three times this year.
JPMorgan said its fourth-quarter return on tangible common equity, a key performance measure, was 14% up from 11% a year-earlier.
Total noninterest expenses fell 3% to US$13.83bil, primarily driven by lower legal expenses.
Also on Friday, Wells Fargo, the largest US mortgage lender, reported a 6.4% fall in profit. Citigroup Inc, Goldman Sachs Group Inc and Morgan Stanley report earnings next week. - Reuters
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