JPMorgan Earnings: The Return of Big Bank Profits

If JPMorgan Chase's (JPM) fourth-quarter earnings are any indication, profits at money center banks and investment firms have rebounded to pre-credit-crisis levels. The firm earned $4.8 billion, or $1.12 a share -- a 47% improvement from last year. The results compared with an average per-share estimate for adjusted earnings of $1 projected by Bloomberg analysts. The numbers were strong even though the firm took charges for its mortgage-related legal expenses.

Full-year 2010 net income was $17.4 billion, an increase of 48% compared with $11.7 billion for the prior year. Earnings per share were $3.96, compared with $2.26 for 2009.

Jamie Dimon, chairman and chief executive officer, commented: "Solid performance in the quarter and for the year reflected good results across most of our businesses, which benefited from strong client relationships and continued investments for growth. Credit trends in our credit card and wholesale businesses continued to improve. In our mortgage business, while charge-offs and delinquencies have improved, credit costs still remain at abnormally high levels and continue to be a significant drag on our returns."

Investment bank net income was $1.5 billion, down 21% from the prior year and up 17% from the previous quarter. The decrease from 2010's fourth quarter reflected higher noninterest expenses, partially offset by stronger revenue and provision for credit losses; the increase from the prior quarter reflected the revenue and lower credit loss provisions.

Retail financial services net revenue was $8.5 billion, an increase of $856 million, or 11%, compared with the year earlier. Net interest income was $4.8 billion, down by $241 million, or 5%, reflecting the impact of lower loan balances and narrower loan spreads, and was partially offset by an increase in deposit balances. Noninterest revenue was $3.7 billion, up by $1.1 billion, or 42%, as higher mortgage fees and related income were partially offset by lower deposit-related fees.

Retail bank net revenue was $4.4 billion, down 2% compared with the previous year. The decrease resulted from lower deposit-related fees and was partially offset by an increase in deposit balances.

Mortgage banking and consumer lending net revenue was $2.8 billion, up by $1.2 billion, or 74%, from a year earlier. Mortgage banking net revenue was $2 billion, up by $1.1 billion. Other consumer lending net revenue, comprising auto and student lending, was $827 million, up by $45 million, predominantly as a result of higher auto loan and lease balances.

Dimon wants to raise the bank's dividend. The results may just give him that chance.


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smarzt0584

IT IS SICKENING HOW BANKS GET FREE HELP TO SCREW AMERICANS EVERY WAY POSSIBLE AND ARE NOT REQUIRED TO GIVE US A DECENT PERCENTAGE ON OUR SAVED MONEY. GET REAL PLEASE. THEY CHARGE ALL SORTS OF FEES FOR BANKING FOR INSTANCE ORIGINATION FEES GIVE ME A BREAK THATS JUST UP FRONT MONEY TO STEAL ALL THEY CAN FROM US MEAN WHILE THEY SAY IT IS A LAW THEY CAN'T GIVE US MORE THAN 1 PERCENT ON SAVINGS OR IRA ACCOUNTS.

January 14 2011 at 2:02 PM Report abuse +1 rate up rate down Reply
1 reply to smarzt0584's comment
us2vrycrus

Your right I worked for a large bnaking firm . You are right

January 14 2011 at 4:55 PM Report abuse rate up rate down Reply
agt4085

Does everyone realize now if we would have let everything collapse we would be the strongest country in every way right now. If we allowed pay to be cut house prices to fall to the lowest possible levels. We would all be able to afford food gas clothing. Because it would have forced the companies to lower their prices. Plus the banks would of had to fire all their ceo's. Then the wealthy would be feeling the same pain. Then the bigger part would be pay in america would start to level of with the rest of the world. And we could start making products again at a profit for companies due to the lower cost of employees. We don't have a democracy or capitalism in america. We have a controlled and forced monarchy. The worst thing we could have possibly done is bailout the banks.

January 14 2011 at 10:42 AM Report abuse rate up rate down Reply
1 reply to agt4085's comment
jkennedy806

I agree, the to big to fail banks should have failed. What a mistake. Maybe your right, we need to totally bankrupt the USA. And start again.

January 14 2011 at 10:45 AM Report abuse rate up rate down Reply
marine1942

Thanks Obama for taking care of Wall Street

January 14 2011 at 8:58 AM Report abuse +2 rate up rate down Reply
ajallenky

Why shouldn't they become profitable?? First, the Treasury Dept.( NAt'l Accounting Standards Bureau ) changed the accounting rules so they didNOT have to report their TOXIC loans, THEN they were allowed to off these same toxic loans to Fannie and Freddie ( guess who pays for that ?? ) all the time borrowing $ from that taxpayers ( Federal Reserve ) at ZERO % interest while charging the SAME taxpayers 5-6 % to borrow their own $ back !!! The spread has been 5-6 % for two years all on the taxpayers back !!! A ten year old could make $ under these circumstances !!! This is the reason banks won't give savers any interest on their savings - why give it to the same taxpayers that you can get $ from for NOTHING then loan it back to them !!!!!!????

January 14 2011 at 8:16 AM Report abuse +5 rate up rate down Reply
1 reply to ajallenky's comment
jkennedy806

Well I have a fannie Mae and if the banks offed their loan - then I should be able to off Wells Fargo, who claims they own my mortgage note, but can't come up with the paperwork. Yes, I have complained to Barney and the OCC - he had no answers either. Maybe I should just start paying the mortgage directly to Fannie Mae. They are the ones that own it. The reason none of US have savings accounts, when an account for savings for interest is initiated sooner or later the bank finds a way to attach some kind of maintenance fee to your hard earned funds. My daughter had a custodial account for money she got for her birthday. The wonderful bank had to give her interest and it was pennies. but the bank turned it over to the State cause my daughter did not have enough activity. The banking system in this county is a mess, and needs to be overhauled -- oh and If I should be so lucky, can i write off my toxic debts too Repo 105 on my 1040 this year. And this preferential selection crap has got to stop too.

January 14 2011 at 10:41 AM Report abuse rate up rate down Reply