J.P. Morgan Chase & Co. said its fourth-quarter profit beat expectations thanks in part to cost-cutting and higher earnings within its investment banking division. The investment bank and financial services giant reported adjusted diluted quarterly earnings per share (EPS) of $1.32 on revenue of $23.75 billion. $2.6 billion returned to shareholders in the fourth quarter of which $1.0 billion of net repurchases and common dividend of $0.44 per share $11.0 billion returned to shareholders in 2015 $4.5 billion of net repurchases and common dividend of $1.72 per share. The results topped analysts’ forecasts, who were looking for JPMorgan to earn $1.26 per share, according to FactSet.
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The reserve releases, however, have also flowed directly into and boosted the banks’ earnings-significantly so at times in recent years when the banks have often had difficulty generating profits from their operating businesses. BMO Capital Markets assumed coverage on shares of JPMorgan Chase & Co.in a research note on Monday, November 2nd. The bank lost $1.06 billion to loan defaults, or 0.52% of its overall portfolio, compared with a 0.65% charge-off rate in the third quarter.
Investors will next turn to the bank’s earnings call Thursday morning to find out whether Chairman and CEO James Dimon or Chief Financial Officer Marianne Lake will shed light on topics ranging from the impact of $30 oil on the bank’s balance sheet to the likelihood of further US interest-rate increases and skittishness about China and Asian stock markets.
Legal charges and the costs of meeting stricter capital requirements have also added to the costs of banks. The bank remained focused on cutting expenses, including through layoffs or other headcount reductions. The Journal said that alone could save tens of millions of dollars in 2016.
Legal expenses were also below the $1 billion in the 2014 quarter.
By divisions, net income in the consumer and community banking group rose by $37 million to $2.53 billion, commercial banking net income was down 22% at $525 million and asset management group net income fell 21% to $451 million for the quarter.
“The businesses generated strong loan growth and credit quality, except for some stress in energy”, he said in a statement. The bank’s total employees fell 3 per cent year-over-year to 234,598 workers.
Banced Corp raised its stake in shares of JPMorgan Chase & Co. Auto lending was up 33 percent from a year earlier.
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Citigroup, the third-biggest USA bank by assets, and Wells Fargo, the top US mortgage lender, are scheduled to report results Friday.
