WASHINGTON (AP) – JPMorgan’s fourth-quarter net income jumped 50% to more than $14 billion. That’s because the bank’s profits and revenues handily beat Wall Street forecasts, and other big banks also reported their highest profits for the year as businesses and consumers continued to spend. Rise in interest rates.
JPMorgan’s earnings per share increased to $4.81 from $3.04 a year earlier. The results beat Wall Street’s earnings estimate of $4.09 per share, according to data firm FactSet. Total managed revenue reached $43.7 billion, an increase of 10% from $39.9 billion in the year-ago period. Wall Street had expected sales of $41.9 billion.
JPMorgan posted a record annual profit of $54 billion, or $18.22 per share, after adjusting for one-time costs.
JPMorgan shares rose less than 1% in morning trading.
Citigroup, Wells Fargo and Goldman Sachs also reported strong results on Wednesday.
The nation’s largest banks have benefited from higher interest rates over the past two years, when the Federal Reserve raised interest rates to combat inflation that took hold after the coronavirus pandemic.
The government’s latest consumer price report, also released on Wednesday, showed that: The prices of many essential goods have increasedThe consumer price index in December was 2.9%, the highest level since July. But the underlying inflation trend the Fed is monitoring slowed to 3.2% in December, better than analysts expected and boding well for consumers and the broader economy.
That, combined with strong bank earnings, pushed the market higher, with the S&P 500 and Dow Jones Industrial Average each rising 1.7% and the tech-heavy Nasdaq rising 2.2%.
2024 was a great year for markets, but bank stocks fared even better despite the Federal Reserve cutting its benchmark interest rate three times between September and December.
When the Fed made its last rate cut in December, Expected interest rate cut in 2025 has been revised downward. It increased from 4 to 2 as inflation remains above the Fed’s 2% target. This sent the market into a minor slump, but it wasn’t enough to dampen an impressive 2024 performance. The S&P rose 23% last year, the Nasdaq rose more than 28% and the Dow ended the year up nearly 13%.
As for banks, Goldman Sachs stock ended 2024 up 48%, JPMorgan rose 41% and Wells Fargo stock rose 43%.
JPMorgan on Wednesday reported interest income fell 3% to $23.5 billion due to lower interest rates.
Chief Executive Jamie Dimon said the bank benefited from its investment banking business as fees rose 49% and market revenue rose 21%. The bank’s consumer banking business also flourished, with customers opening nearly 2 million checking accounts.
The Bank of New York set aside $2.6 billion to cover bad loans, down slightly from the same period last year.
Dimon said the U.S. economy remains strong, pointing to low unemployment and strong consumer spending.
“Businesses are becoming more optimistic about the economy and are encouraged by expectations for more pro-growth policies and improved collaboration between government and business,” he said, alluding to the impact of the incoming Trump administration. promised to reduce regulations across the industry.
Mr. Dimon said any regulation must balance promoting growth with keeping the banking system safe.
“This is not about weakening regulation, but rather setting rules for a transparent, fair and comprehensive approach, based on rigorous data analysis, that allows banks to play a vital role in the economy and markets. .”
But Dimon said the geopolitical situation “remains the most dangerous and complex since World War II” and that JPMorgan is preparing for a wide range of outcomes.
JPMorgan announced this week that Mr. Dimon’s chief agent, Daniel Pinto, will step down as president and chief operating officer at the end of June and retire at the end of 2026. Jennifer Piepszak, co-chief executive officer of the bank’s commercial and investment bank, will assume the role of COO, with guidance from Mr. Pinto.
Mr. Pinto, who has been with the bank for more than 40 years, was expected to take over as chief executive officer after Mr. Dimon said last spring that he expected to retire within five years.
A bank spokeswoman said Tuesday that Mr. Piepszak is not currently interested in filling the CEO role when Mr. Dimon retires, and that another bank executive will eventually fill the role when he takes over. He said that there is a possibility that he will play a role.
Wells Fargo also beat estimates Wednesday, with net income up nearly 50% to $5.1 billion, or $1.43 per share, in the fourth quarter. Sales were $20.4 billion, slightly lower than expected. In the same period last year, Wells earned $3.4 billion, or 86 cents per share, on sales of $20.5 billion.
Wells Fargo in September agreed to cooperate with U.S. banking regulators Strengthen financial crime risk management, including internal controls related to suspicious activity and money laundering. The deal comes just seven months after the Biden administration took office. canceled the consent order The regulation was introduced at the bank in 2016 following a series of scandals including the opening of fake customer accounts.
Wells rose 5.3% in early trading.
Citigroup and Goldman Sachs rose 5.7% and 5.4%, respectively, after both banks beat Wall Street’s profit expectations. Goldman said its global banking and markets business generated nearly $35 billion in revenue, driven by strong performance in equity and investment banking.
Goldman claimed to lead global companies in mergers and acquisitions in 2024.
