JPMorgan Chase posts record-breaking yearly profit, as fourth-quarter earnings beat analyst estimates

By Steve Gelsi

The Wall Street bank said 2023 was its most profitable year ever, with full-year net income tipping the scales at $49.6 billion

It was a record-breaking 2023 for JPMorgan Chase & Co. on the earnings front.

In its fourth-quarter earnings report Friday, JPMorgan (JPM) said last year was its best year ever for full-year net income, which tipped the scales at $49.6 billion

The Wall Street bank's fourth-quarter net-interest income of $24.2 billion also set a record, as did its full-year net-interest income of $90 billion, excluding markets.

JPMorgan's fourth-quarter net income dropped to $9.3 billion, or $3.04 a share, from $11 billion, or $3.57 a share, in the year-ago period. The bank's fourth-quarter adjusted profit beat analyst estimates, although its earnings were impacted by a $2.9 billion charge for the Federal Deposit Insurance Corp.'s special assessment related to last year's failure of Silicon Valley Bank and other financial institutions.

Excluding one-time items such as the FDIC special assessment, fourth-quarter profit totaled $3.97 a share, well ahead of the FactSet consensus estimate of $3.35 a share.

The bank's stock ended the session Friday with a drop of 0.7% after rising earlier in the day.

"[JPMorgan] really set the tone this quarter coming out with strong net-interest income," David Wagner, a portfolio manager and equity analyst at Aptus Capital Advisors, said in an email to MarketWatch.

The bank's overall results were "reassuring" as its scale "continues to make it differentiated," Wagner said.

Reported revenue rose to $38.57 billion, from $34.55 billion in the same period last year. Managed revenue totaled $39.9 billion in the fourth quarter, which beat the analyst estimate of $39.73 billion in revenue.

"The U.S. economy continues to be resilient, with consumers still spending, and markets currently expect a soft landing," JPMorgan Chief Executive Jamie Dimon said in a statement. "It is important to note that the economy is being fueled by large amounts of government deficit spending and past stimulus. This may lead inflation to be stickier and rates to be higher than markets expect."

The bank is forecasting six interest-rate cuts by the U.S. Federal Reserve in 2024.

JPMorgan's fourth-quarter net-interest income of $24.2 billion excluding markets beat the analyst estimate of $23 billion. Net-interest income reflects a bank's profit on loans minus the money it pays out for interest on deposits.

Looking ahead, JPMorgan expects 2024 net-interest income excluding markets of about $88 billion. That forecast is stronger than the analyst estimate of $86.5 billion.

Dimon said the bank remains cautious in the face of wars in Ukraine and the Middle East, which have the potential to disrupt energy and food markets, migration, and military and economic relationships,"in addition to their dreadful human cost."

Breaking out some of its operating units, JPMorgan said its corporate- and investment-bank market revenue rose 2% to $5.8 billion, with fixed-income market revenue up by 8%, while equity-market revenue dropped by 8%.

In its commercial bank, gross investment-banking and markets revenue rose 32% to $924 million.

Assets under management rose 24% to $3.4 trillion.

Prior to Friday's trading, JPMorgan's stock had risen 1.3% in 2024, compared with a 0.2% increase by the S&P 500 .

JPMorgan's earnings came on a busy day for bank earnings, with Wells Fargo & Co. (WFC), Citigroup Inc. (C) and Bank of America Corp. (BAC) all weighing in with their fourth-quarter results.

Also read: Bank of America's stock slides 2% as earnings almost halve from a year ago

Also read: Wells Fargo's stock falls as credit-loss provisions jump, profit was in line

Also read: Citigroup to cut 20,000 jobs by 2026 after 'very disappointing' quarter as it posts loss

-Steve Gelsi

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01-12-24 1614ET

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