JPMorgan Q4 Profit Down 14%, But Results Top Estimates

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US investment bank JPMorgan Chase & Co. (JPM) reported Friday a profit for the fourth quarter that declined 14 percent from last year, hurt primarily by higher noninterest expense and lower credit reserve releases. Both adjusted earnings per share and revenues for the quarter topped analysts' expectations.

"JPMorgan Chase reported solid results across our businesses benefiting from elevated capital markets activity and a pick up in lending activity as firmwide average loans were up 6%," said Jamie Dimon, Chairman and CEO.

Net income for the quarter grew to $10.40 billion or $3.33 per share from $12.14 billion or $3.79 per share in the prior-year quarter.

On average, 22 analysts polled by Thomson Reuters expected the company to report earnings of $3.01 per share for the quarter. Analysts' estimates typically exclude special items.

The provision for credit losses was a net benefit of $1.29 billion, compared to last year's net benefit of $1.89 billion, driven by net reserve releases of $1.8 billion and $550 million of net charge-offs.

Total net revenue on a reported basis was $29.26 billion. On a managed basis, net revenue was $30.35 billion, up 1 percent from $30.16 billion in the previous year. The Street expected revenues of $29.98 billion for the quarter.

Net interest income was $13.7 billion, up 3 percent, driven by balance sheet growth, partially offset by lower net interest income in CIB Markets.

Non-interest revenue was $16.6 billion, down 1 percent from last year, largely driven by lower revenue in CIB Markets and Home Lending, predominantly offset by higher Investment Banking fees.

Noninterest expense was $17.89 billion, up 11 percent, driven largely on higher compensation.

Consumer & Business Banking net revenue was $6.17 billion, up 7 percent, predominantly driven by higher asset management fees and increased debit transactions.

Banking revenue surged 28 percent to $5.27 billion, while markets & securities services revenue declined 13 percent to $6.26 billion from last year.

"Credit continues to be healthy with exceptionally low net charge-offs, and we remain optimistic on U.S. economic growth as business sentiment is upbeat and consumers are benefiting from job and wage growth," Dimon added.

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