JPMorgan Chase grew net income by 34 per cent on an underlying basis in the fourth quarter but fell short of analysts’ expectations after fixed income trading revenues fell sharply amid December’s market turmoil.
The bank — America’s biggest by assets — became the second of Wall Street’s giants to report earnings overshadowed by markets woes, after Citi posted a 21 per cent fall in fixed income revenues in its results on Monday.
At JPMorgan, fixed income revenues fell 16 per cent to $1.9bn, in a quarter when revenue across the firm rose 4 per cent to $26.8bn on a managed basis. Analysts polled by S&P Global Intelligence had predicted firm-wide revenues of just over $27bn for the quarter.
The bank blamed the fixed income result on “challenging market conditions” in credit, trading, rates and commodities, which was only partially offset by strong results in emerging markets.
Chief executive Jamie Dimon said the bank had done well overall, increasing revenue and profits in each of its businesses in 2018, as firm wide net income rose to $7.066bn for the final quarter.
“As we head into 2019, we urge our country’s leaders to strike a collaborative, constructive tone, which would reinforce already-strong consumer and business sentiment,” he said, in a thinly-veiled reference to the US government shutdown which has just entered its fourth week.
“Businesses, government and communities need to work together to solve problems and help strengthen the economy for the benefit of everyone.”
Across divisions, JPMorgan’s corporate and investment bank suffered a 4 per cent fall in net revenues for the quarter versus a year earlier and a 15 per cent fall in net income, driven by the fixed income result.
JPMorgan’s consumer and community bank increased revenues by 13 per cent year on year to $13.7bn, and Mr Dimon said the bank was seeing “terrific results” from its new bank openings.
The fourth quarter’s net income was up 67 per cent on the fourth quarter of 2017 on a reported basis, and up 34 per cent on an underlying basis after stripping out the $2.4bn tax hit JPMorgan took last year because of America’s corporate tax cuts.
Laura Noonan
