JPMorgan Chase earnings lap analyst expectations

Bloomberg

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JPMorgan Chase handily beat analyst expectations for its financial performance at the end of 2024, as credit remained solid and investment banking fees surged across all products.

The largest bank in the country reported Wednesday that it reeled in $14 billion in net income for the three months ended Dec. 31, up 50% from the year-ago quarter. Investment banking fees, which have helped buoy earnings for most of 2024, grew 49% year-over-year, surpassing analysts' predictions of a 45% annual rise.

Chairman and CEO Jamie Dimon said in a statement that each line of the bank's business "posted solid results" and the economy has been "resilient," adding that businesses are looking toward 2025 optimistically with "expectations for a more pro-growth agenda and improved collaboration between government and business." Still, he reiterated warnings of possible hitches for the coming year.

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"Two significant risks remain," Dimon said. "Ongoing and future spending requirements will likely be inflationary, and therefore, inflation may persist for some time. Additionally, geopolitical conditions remain the most dangerous and complicated since World War II."

In the fourth quarter, JPMorgan posted diluted earnings per share of $4.81, far above the consensus estimate of $4.10, per S&P data.

The bank's revenue, at $42.8 billion, rose 11% from a year ago and was in line with expectations.

The spike in investment banking fees, along with higher asset management fees and lower losses on the securities portfolio, boosted noninterest revenue excluding markets by 30% to $13.7 billion.

Net interest income, excluding the high-performing markets business, fell 3% to $23.5 billion, as previously projected, as lower interest rates limit how much the bank can reel in on assets. JPMorgan saw total loans grow by 2% year-over-year, in line with tepid debt originations across the industry, and deposits at the bank also rose 2%.

Looking ahead, the bank expects about $90 billion in net interest income, excluding markets, for 2025 as its balance sheet growth partially offsets lower rates. That would be down from the $92.4 billion achieved in 2024.

Capital levels also grew, with Common Equity Tier 1 capital ratio of 15.7%, even as previous expectations for a regulatory overhaul of capital requirements have simmered. Dimon said Wednesday that the bank thinks regulation must both support economic growth and protect the banking system.

"It is possible to achieve both goals," Dimon said. "This is not about weakening regulation … but rather about setting rules that are transparent, fair, holistic in their approach and based on rigorous data analysis, so that banks can play their critical role in the economy and markets."

Dimon in October criticized what he called an onslaught of regulation that was putting pressure on banks.

Deteriorating credit quality at the bank had also been flagged earlier this year, after its provision for credit losses had doubled in the second quarter. But the most recent quarter's provision for credit losses, of $2.6 billion, marked the lowest figure since the beginning of 2024, and a 5% decrease from the prior year.