Investment Banking Fees Helps JPM Posts Impressive Q4 Earnings

Profits at the second-largest US bank, JPMorgan Chase & Co (NYSE: JPM), more than quadrupled in Q4, as revenues from investment-banking fees exceeded expectations. JPM, however, disappointed on weak revenues.

As JPM kicked off the Q4 earnings season for America’s top banks, it stated that its net income had climbed to $3.28 billion, or $0.74 per share, from $702 million, or $0.06, in the same period a year earlier. This figure was much better than $0.61 a share that Wall Street had anticipated, driven by the investment banking business which earned profits of $1.9 billion in the quarter on robust debt and stock underwriting fees.

JPM’s CEO, Jamie Dimon, stated that although the results showed improvement, they fell short in terms of return on capital and the company’s earnings potential. Dimon added that although delinquencies seem to have become stable, consumer credit costs remain high, with a weakness in employment and home prices persisting. As a result, JPMorgan Chase & Co has boosted its loss reserves for consumer loans by $1.9 billion, bringing the total to $32.5 billion.

JPM’s shares fell 0.94% to $44.27 in pre-market trading.

Next week, Citigroup (C), Bank of America (BAC), Wells Fargo (WFC), Goldman Sachs (GS) and Morgan Stanley (MS) are set to release their numbers for Q4 and the full year.