JPMorgan Chase on Monday morning kicked off its fourth-quarter report on bank earnings with a big miss.
Earnings per share came in at $US1.19, while revenue came in at $US23.5 billion.
Analysts expected earnings per share to come in at $US1.31, with revenues of $US23.66 billion, according to FactSet.
The fourth quarter included $US990 million worth of legal costs.
For the year JP Morgan brought in a revenue of $US97,923, down from 2013’s $US99,798.
Another number you should know: Profit declined 6.6% from the same time last year, in part because of this massive legal cost but also because of weak trading revenue.
That number reflects the strange market of 2014. In the summer, traders were begging for some volatility. They got more than they asked for at the end of the year.
Fixed-income trading was down a whopping 23% from the same time last year. In its release, JPMorgan writes that some losses were due to “business simplification.” That aside, the bank says fixed-income trading still fell 14%.
JPMorgan’s investment bank in general, however, did all right (legal fees aside, though they’re never really aside). Net income was up 3% from the same time in 2013, rising to $US972 million from $US941 million. The biggest problem in the investment bank, aside from trading, was in equity underwriting — down 25% from the same time last year.
JPMorgan’s commercial-banking unit had a rough quarter, with net income of $US693 million, down 3% from the same time last year. Revenue also got hit — down 6% to $US1.8 billion — as did net interest income, down 10% to $US1.1 billion.
Now a few words from CEO Jamie Dimon from the release:
“Our businesses continue to demonstrate strong momentum and expense discipline. Consumer & Community Banking delivered impressive growth in deposits and investment assets in the fourth quarter and throughout 2014, while outperforming its expense reduction target for the year. Mortgage originations improved sequentially in the fourth quarter, despite a seasonally slow quarter. Our Card business delivered double-digit sales volume growth, outpacing the industry for the 27th consecutive quarter. Auto had a good quarter and the pipeline remains strong.”
Dimon added: “The Corporate & Investment Bank saw strong performance in fees, maintaining its #1 position in Global IB fees in 2014 with particular strength in Europe, although Markets remained somewhat challenged. Commercial Banking grew period-end loans 8% versus the prior year and Commercial Banking clients generated record investment banking revenues for the quarter and the year. Lastly, Asset Management had over $US80 billion of net long-term inflows for the second consecutive year and overall AUM grew 9% this quarter compared to the prior year.”
Dimon concluded: “2014 was a record year for the Firm for net income and EPS. We delivered on our commitments — including business simplification, controls, expense discipline and meeting our capital targets for the year — while maintaining excellent customer satisfaction rankings. I am proud of this great company, its exceptional management team and employees, and everything we are achieving for our clients, shareholders and communities. Each of our businesses and the company are very well positioned going into 2015 for long-term growth and success.”