JPMorgan Chase & Co Q4 Profit Tops Estimates; Managed Net Revenue Up 3%
JPMorgan Chase & Co (JPM) reported strong results in the fourth quarter of 2020, with net profit up 42% largely driven by credit reserve releases of $2.9 billion. The Group said it ended the year with a CET1 ratio of 13.1% and capital above $200 billion, providing with meaningful capacity to further invest in business and communities, while returning capital to shareholders.
Fourth quarter earnings per share was $3.79 compared to $2.57, last year. The company noted that its fourth quarter results included $2.9 billion of credit reserve releases Firmwide which resulted in $0.72 increase in earnings per share. On average, 23 analysts polled by Thomson Reuters expected the company to report profit per share of $2.62, for the quarter. Analysts’ estimates typically exclude special items. Net income was $12.14 billion compared to $8.52 billion, a year ago.
Fourth quarter net revenue on a reported basis was $29.2 billion, compared to $28.3 billion, previous year. Net revenue – managed – was $30.16 billion compared to $29.17 billion. Analysts expected revenue of $28.7 billion, for the quarter.
Fourth quarter noninterest revenue was $16.8 billion, up 13%. Net interest income was $13.4 billion, down 7%, predominantly driven by the impact of lower rates as well as balance sheet mix, largely offset by balance sheet growth and higher net interest income in CIB Markets. Noninterest expense was $16.0 billion, down 2%.
The provision for credit losses was a net benefit of $1.9 billion, compared to an expense of $1.4 billion in the prior year driven by reserve releases in the current quarter.
“While positive vaccine and stimulus developments contributed to these reserve
releases this quarter, our credit reserves of over $30 billion continue to reflect
significant near-term economic uncertainty and will allow us to withstand an economic
environment far worse than the current base forecasts by most economists,” Jamie Dimon, Chairman and CEO, said.
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