NEW YORK – Banking giant JPMorgan Chase said profit jumped 21% in the final three months of 2019, as the bank's trading desks had a blowout quarter, which offset the impact of declining interest rates.
The New York-based bank, one of multiple financial services companies to report earnings Tuesday, said it had a profit of $8.52 billion, or $2.57 per share. That's up from $7.07 billion, or $1.98 a share, in the same period a year earlier. The bank beat the forecast of analysts who were looking for it to earn $2.35 a share.
JPMorgan's investment banking division was the biggest driver of the profit gains this quarter, particularly its trading desks. Revenues from trading jumped 55% from the year-earlier quarter, when the trading business slumped as the stock market declined sharply.
But there were signs that JPMorgan's business faced some headwinds in the quarter. Net interest income fell 2%, as the Federal Reserve's decision last year to cut interest rates forced JPMorgan and other banks to cut their prices on loans. While the bank saw more consumers using credit cards and carrying balances, it also reported a rise in credit card delinquencies.
JPMorgan set aside 15% more money in the full year to cover bad loans as it did in 2018.
Even so, JPMorgan had a record year in profits and revenue. The bank earned a full-year profit of $36.4 billion on revenue of $115.63 billion.
Wells Fargo's net income tumbled in the fourth quarter, weighed down by hefty costs and a lower interest rate environment.
The San Francisco-based bank earned $2.87 billion, or 60 cents per share, for the period ended Dec. 31. A year earlier it earned $6.06 billion, or $1.21 per share. The results included 33 cents per share of litigation accruals.
Analysts polled by FactSet predicted a profit of $1.12 per share.
Wells is still under growth restrictions by regulators after years of missteps, beginning in 2016 with the uncovering of millions of fake checking accounts its employees opened to meet sales quotas. In 2018 the Federal Reserve capped the size of Wells Fargo's assets. The Fed hasn't said when it will lift the restrictions on the bank.
Citigroup's fourth-quarter profits rose by 15%, as the banking conglomerate benefited from a boost in trading similar to competitor JPMorgan Chase.
The New York-based bank said Tuesday that it earned a profit of $4.98 billion, or $2.15 per share, compared with a profit of $4.3 billion, or $1.65 per share, in the same period a year earlier. The results topped analysts' expectations for a profit of $1.81 a share, according to FactSet.
Like JPMorgan Chase, Citi saw a boost in profits from its trading operations. Bond trading revenues rose 49% from a year earlier, when a steep downfall in the markets in the fourth quarter took its toll on all banks' trading desks.
In Citi's consumer group, profits rose 12% from a year earlier, helped by the bank's large credit card division where more consumers borrowed and spent during the holiday season.
For the full year, Citi had a profit of $19.4 billion, up from $18.05 billion in 2018.