NEW YORK – Bank giant JPMorgan Chase said that the profit increased by 21% in the last three months of 2019, because the bank’s trading desks had a burst quarter, which offset the impact of falling interest rates.
The New York-based bank earned a profit of $ 8.52 billion, or $ 2.57 per share. That’s an increase of $ 7.07 billion, or $ 1.98 per share, in the same period a year earlier. The bank beat the forecast of analysts looking for JPMorgan to earn $ 2.35 per share.
JPMorgan’s Investment Banking division was the biggest driver of earnings earnings this quarter, in particular the commercial banks. Trading income increased by 55% compared to the same quarter last year, when trading activities fell when the stock market fell sharply.
Apart from the strong performance of the investment bank, there were signs that JPMorgan’s activities had to face a headwind in the quarter. Net interest income decreased by 2% because the Federal Reserve’s decision to lower interest rates last year forced JPMorgan and other banks to lower their prices on loans. Consumer banking and home loan income slowed down, and although the bank saw more consumers working with credit cards and balances, it also reported an increase in credit card arrears.
JPMorgan has reserved 15% more money throughout the year to cover bad loans like in 2018.
Yet JPMorgan had a record year in profit and revenue. The bank earned an annual profit of $ 36.4 billion on sales of $ 115.63 billion. The return on the bank’s common stock, a measurement in the banking sector of how well a bank is performing with the assets it holds, was 15% for 2019 compared to 13% in 2018. Big Wall Street banks such as JPMorgan generally want to see returns on common equity above 10%.
Ken Sweet, The Associated Press