JP Morgan today reported record full-year profits despite a slowdown in business operations and rising costs that weighed on fourth-quarter profit margins.
Profits for the full year hit a record $48.3 billion, but the final quarter of the year fell to $10.4 billion, down 14% from a year earlier.
Analysts had expected the biggest US bank’s profits to fall further last quarter, but performance was lifted by a stellar performance from its investment banking division following an increase in activity world of mergers and acquisitions.
Loan growth, the bank’s core business, also increased by 6% as the economy recovered, while net interest income on loans and investment in Treasury securities increased by 3%.
Jamie Dimon, Chief Executive of JP Morgan, said: “The economy continues to do well despite headwinds from the Omicron variant, inflation and supply chain bottlenecks.
“We remain bullish on U.S. economic growth as the business climate is upbeat and consumers are benefiting from job and wage growth.”
The bank beat analysts’ expectations despite slowing growth with earnings of $3.33 per share beating analysts’ forecast of $3.01 per share, according to Refinitiv data.
JP Morgan’s stock price slipped 3% in premarket trading and continued to fall after the opening bell to as much as 6% below its opening price.
Rivals Wells Fargo and Citigroup also both beat profit estimates after an increase in lending activity, despite falling profits.
Citigroup reported a 26% drop in profit last quarter, but the bank’s performance was buoyed by soaring fees in its investment banking division, which helped it beat analysts’ estimates .
Wells Fargo’s revenue reached $20.86 billion, beating the consensus estimate of $18.82 billion, while earnings per share reached $1.25 per share, beating analysts who had forecast a profit of $1.13 per share.