JPMorgan just posted its worst bond trading results since the financial crisis

  • JPMorgan’s fourth-quarter results missed estimates on lighter-than-expected corporate and investment banking revenue and expenses that came in slightly higher than analysts’ average estimate.
  • Bond trading was particularly bad, with the bank posting the worst results since the end of 2008.
  • Its rival Citi, which reported on Monday, beat earnings expectations.

JPMorgan Chase announced fourth-quarter results Tuesday and posted earnings of $US1.98 a share. Analysts had expected earnings of $US2.21.

It was a rare miss from JPMorgan – the first time in 10 quarters- and was driven by lower-than-expected revenue in the firm’s investment bank. Here are the key numbers:

  • Revenue: $US26.8 billion, up 4% from last year. Analysts had predicted $US26.9 billion.
  • Expenses: $US15.7 billion, up 6%. Analysts had predicted $US15.6 billion.
  • Adjusted net income: $US7.1 billion, up 67% from last year.
  • Corporate and investment banking revenue: $US7.2 billion in revenue, down 4%. KBW analysts had predicted revenue of $US7.6 billion, based on weakness in trading. Adjusted bond trading came in particularly light at $US1.9 billion, down 18% (compared with a $US2.2 billion estimate from KBW). It was the bank’s worst period for bonding trading since the fourth quarter of 2008.
  • Consumer and community banking revenue: Revenue came in at $US13.7 billion, up 13% from the prior year. JPMorgan Chase is the biggest US bank by deposits, and this is the unit that holds most of that money on behalf of households. KBW had analysts predicted revenue of $US13.6 billion.
  • Commercial banking: Revenue was $US2.3 billion, down 2% from the prior year. KBW analysts predicted $US2.2 billion in revenue.
  • Asset and wealth management: Revenue of $US3.4 billion fell 5%. KBW analysts predicted $US3.6 billion in revenue.

“Our customer-centric business model has benefited from a healthy and engaged US consumer that is spending, saving, and investing,” CEO Jamie Dimon said in the statement. “Despite a challenging quarter, we grew Markets revenue in the Investment Bank for the year with record performance in Equities and solid performance in Fixed Income. Investment Banking fees were a record for the year, driven by strength in both CIB and Commercial Banking.”

JPMorgan’s rival Citi reported earnings on Monday. Citi posted an earnings beat but missed on revenue, which fell 2% from last year.

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