JPMorgan on Friday reported fourth-quarter earnings that beat on the top and bottom lines.
The corporate and investment bank, in particular, had its best revenue on record for a fourth quarter, according to chief financial officer Marianne Lake.
The markets business — including both fixed income and equities trading — also had its highest revenues on record for the fourth quarter.
Fixed income revenues were up 31% and equities revenues up 8%. Investment banking fees increased 1% from the prior-year quarter.
Daniel Pinto, the chief executive of the firm’s corporate and investment bank, sent the following memo to his staff to mark the occasion:
As part of today’s firm-wide earnings, the CIB reported quarterly revenue of $8.5 billion, up 20% year-over- year and a fourth quarter record. We generated $3.4 billion of net income during the quarter and a return on equity of 20%.
For the full year, the CIB generated $35.2 billion of revenue, up 5% from 2015 and the best performance since 2009. Net income for the full year jumped to $10.8 billion, 34% higher than 2015, and we produced a return on equity of 16%. On all accounts, today’s results are impressive.
Q4 2016 CIB performance highlights include (year-over- year):
Our banking franchise remained #1 in global investment banking fees, and #1 in both North America and EMEA. J.P. Morgan was also the only investment bank in the top five to gain global wallet share in 2016. We finished the year ranked #2 in global M&A and advised on more deals than any other bank. We also ended 2016 as the top underwriter in both equity and debt capital markets, ranking #1 in IPOs and convertibles as well as high-yield bonds, high-grade bonds and syndicated loans. In Treasury Services, revenues continued to rise, primarily due to higher interest rates and operating balances.
The momentum in Markets continued. We reported quarterly revenue of $4.5 billion, a fourth quarter record on the strength of record performances from both equities and fixed income. The higher trading volumes we witnessed in the third quarter carried through to the end of the year as investors actively positioned their portfolios in response to political developments and central bank actions. We witnessed particular strength in the credit markets as risk appetite increased on the back of better growth prospects for the US economy, an improvement in oil prices and a healthy third quarter earnings cycle.