Updated at 7:12 AM EST
JP Morgan posted stronger-than-expected fourth quarter earnings Wednesday as dealmaking help boost the group’s bottom line and offset an overall slide in net interest income tied to lower Federal Reserve interest rates.
JP Morgan (JPM) said earnings for the three months ending in December were pegged at $14.005 billion, or $4.81 per share, up 58.2% from the prior-year period and well ahead of the Street consensus forecast of $4.11 per share.
Group revenues, JP Morgan said, rose 22.2% from last year to $42.8 billion, again ahead of analysts’ estimates of a $41.73 billion tally, while expenses were pegged at $22.76 billion.
Net interest income was $23.5 billion, down 2.9% from the year-ago period, while the bank also built $2.63 billion in reserves to set against bad loans and credit losses.
Investment banking revenue was up 46% to $2.6 billion, thanks in part to a healthy fourth quarter in global dealmaking that capped an otherwise muted year for mergers and acquisitions.
London Stock Exchange Group indicated that while the overall value of M&A deals rose 10% last year to $3.2 trillion, the total number of transactions fell to the lowest levels in nearly a decade.
JP Morgan CEO Jamie Dimon
“The U.S. economy has been resilient,” said JP Morgan CEO Jamie Dimon.”Businesses are more optimistic about the economy, and they are encouraged by expectations for a more pro-growth agenda and improved collaboration between government and business.”
“Two significant risks remain,” he added. “Ongoing and future spending requirements will likely be inflationary, and therefore, inflation may persist for some time. Additionally, geopolitical conditions remain the most dangerous and complicated since World War II.”
JP Morgan shares were marked 1.4% higher in premarket trading immediately following the earnings release to indicate an opening bell price of $250.90 each.
LSEG data suggests financial sector earnings will grow 22.7% from the prior-year period and contribute around 17.5% of the collective $519.9 billion forecast for S&P 500 profits over the fourth quarter.
Related: Analyst resets bank stocks forecast ahead of earnings
Earlier this week, Dimon’s close associate Daniel Pinto, seen by many as a possible replacement for the longtime CEO, announced his surprise retirement as chief operating officer after more than three decades with the bank.
Jennifer Piepszak, another JP Morgan veteran, was named as his replacement but isn’t expected to lobby for the top job when Dimon steps down, as planned, in 2029.
Related: Veteran fund manager issues dire S&P 500 warning for 2025
