JP Morgan Chase said on Thursday that despite weakness in its global trading business, its revenue and profit were up modestly in the fourth quarter of 2015.
The earnings for the bank, America’s largest, was up 10 percent from the quarter a year earlier, but down from the third quarter of 2015 with earnings of $5.4 billion, or $1.32 a share, in the fourth quarter. Analysts who were polled by Thomson Reuters had made predictions that the anticipated profits would be $1.25 a share but the results were better than the expectations of analysts.
In an era of higher regulations and relatively slow growth, the bank has aggressively pushed continuing cuts to the bank’s expenses and work force which, the bank claims were the major reasons of the improvement in the results and profits.
“We’re very happy with our expense story for the year,” the bank’s chief financial officer, Marianne Lake, said during a call with analysts on Thursday.
Shares of JPMorgan were up slightly in trading in the US.
As the result of the falling price of oil, lending to oil and energy companies was one area of weakness of the bank. In order to cover losses in that area, JPMorgan had put more than $100 million aside in the fourth quarter and added that it would need to put more aside if oil prices stayed low.
Lower legal costs helped the company’s Wall Street operations. There was however revenue shrinkage at nearly all of the underlying trading and investment banking businesses. There has been a stutter in the global growth primarily due to the slowdown in China and because interest rates have begun to move up in the United States and this has caused investors to shy away from risk-taking.
“You have a big change in the world out there — people are getting adjusted to China slowing down,” the bank’s chief executive, Jamie Dimon, said during the call with analysts.
While JPMorgan is the first of the big banks to report fourth-quarter results, Citigroup and Wells Fargo is scheduled to present their report on Friday.
There were predictions of a relatively sluggish quarter for the banking industry and JPMorgan’s results were largely in line with the predictions. Cost cuts rather than business growth has driven the results of most of the big banks.
While for the year, revenue fell by 1 percent at JPMorgan, it posted a 1 percent rise in revenues for the quarter compared to the previous year to reach $23.75 billion.
Despite this, the bank managed to reach a record $24.4 billion in profits in the final quarter which is being considered as good by analysts.
Core lending of the bank grew 16 percent from the final quarter of 2014 and is indicative of some degree of growing strength in the American economy.
“We think that the U.S. economy looks pretty good at this point,” Mr. Dimon said.
It is indicated by the results that the annual bonuses for 2015 will probably be lower than the previous year. The amount set aside for compensation in 2015 fell 5 percent in the Wall Street division. The figure for the much larger consumer bank was a fall of 7 percent.
JP Morgan had brought down a regulatory surcharge imposed on the country’s biggest banks: the so-called global systemically important bank surcharge.. this was among the bank’s significant announcements on Thursday.
By reducing certain types of deposits and assets the bank said I believed that it had lowered G.S.I.B. surcharge by two notches — from 4.5 percent to 3.5 percent even as it had initially faced the highest G.S.I.B. surcharge of any American bank.
(Source:www.nytimes.com)
The earnings for the bank, America’s largest, was up 10 percent from the quarter a year earlier, but down from the third quarter of 2015 with earnings of $5.4 billion, or $1.32 a share, in the fourth quarter. Analysts who were polled by Thomson Reuters had made predictions that the anticipated profits would be $1.25 a share but the results were better than the expectations of analysts.
In an era of higher regulations and relatively slow growth, the bank has aggressively pushed continuing cuts to the bank’s expenses and work force which, the bank claims were the major reasons of the improvement in the results and profits.
“We’re very happy with our expense story for the year,” the bank’s chief financial officer, Marianne Lake, said during a call with analysts on Thursday.
Shares of JPMorgan were up slightly in trading in the US.
As the result of the falling price of oil, lending to oil and energy companies was one area of weakness of the bank. In order to cover losses in that area, JPMorgan had put more than $100 million aside in the fourth quarter and added that it would need to put more aside if oil prices stayed low.
Lower legal costs helped the company’s Wall Street operations. There was however revenue shrinkage at nearly all of the underlying trading and investment banking businesses. There has been a stutter in the global growth primarily due to the slowdown in China and because interest rates have begun to move up in the United States and this has caused investors to shy away from risk-taking.
“You have a big change in the world out there — people are getting adjusted to China slowing down,” the bank’s chief executive, Jamie Dimon, said during the call with analysts.
While JPMorgan is the first of the big banks to report fourth-quarter results, Citigroup and Wells Fargo is scheduled to present their report on Friday.
There were predictions of a relatively sluggish quarter for the banking industry and JPMorgan’s results were largely in line with the predictions. Cost cuts rather than business growth has driven the results of most of the big banks.
While for the year, revenue fell by 1 percent at JPMorgan, it posted a 1 percent rise in revenues for the quarter compared to the previous year to reach $23.75 billion.
Despite this, the bank managed to reach a record $24.4 billion in profits in the final quarter which is being considered as good by analysts.
Core lending of the bank grew 16 percent from the final quarter of 2014 and is indicative of some degree of growing strength in the American economy.
“We think that the U.S. economy looks pretty good at this point,” Mr. Dimon said.
It is indicated by the results that the annual bonuses for 2015 will probably be lower than the previous year. The amount set aside for compensation in 2015 fell 5 percent in the Wall Street division. The figure for the much larger consumer bank was a fall of 7 percent.
JP Morgan had brought down a regulatory surcharge imposed on the country’s biggest banks: the so-called global systemically important bank surcharge.. this was among the bank’s significant announcements on Thursday.
By reducing certain types of deposits and assets the bank said I believed that it had lowered G.S.I.B. surcharge by two notches — from 4.5 percent to 3.5 percent even as it had initially faced the highest G.S.I.B. surcharge of any American bank.
(Source:www.nytimes.com)