JPMorgan Chase, America’s largest bank by assets, has reported 2020 fourth quarter net income of $12.1bn, or $3.79 per share. This compares with net income of $8.5bn, or $2.57 per share, in the fourth quarter of 2019.
The better than expected 42% jump in profit was largely driven by the release of credit reserves of $2.9bn previously set aside in anticipation of Covid-related loan losses.
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The big US lenders spent 2020 grappling with the economic fallout of the Covid-19 pandemic, setting aside billions to cover expected loan losses. Analysts are expecting a rebound in their profits in 2021, as several banks start releasing reserves.
JPMorgan’s investment bank profit soared 43% during the year
Another major contributor to JPMorgan’s bottom line was the trading and investment banking unit.
This part of the business benefited from volatility in financial markets, as investors reassessed their portfolios at the end of the year. Investment banking revenue surged 37% to $2.5bn, driven by higher advisory fees across all its products.
JPMorgan’s net revenue on a reported basis was $29.2bn, $29.1bn, and $28.3bn for the fourth quarter of 2020, third quarter of 2020, and fourth quarter of 2019, respectively.
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By GlobalDataThe full-year net income for 2020 was $21.1bn, or $8.88 per share. The Manhattan-based bank ended the year in better shape than most of its peer lenders.
Jamie Dimon, Chairman and CEO, elaborates on the financial results:
“In Consumer & Community Banking, deposits grew 30% or over $200bn driven primarily by growth in the Federal Reserve’s balance sheet and the continuation of modest market share gains.
“Within our consumer lending franchise, auto and retail mortgage originations were both up more than 20%. Consumer spending continued to recover, as reflected in combined debit and credit card spend being up for the full quarter.
“The Corporate & Investment Bank delivered another impressive quarter with growth in Global Investment Banking fees of 34% and Markets revenue of 20%.
“With a record quarter, Commercial Banking earned $3.3 billion of investment banking revenue in 2020, surpassing its previous $3 billion long-term target.
“Asset & Wealth Management, AUM grew 17% due to higher asset values and net inflows of over $190 billion into long-term and liquidity products over the last twelve months.”
Dimon said the bank opened branches in new markets, improved its digital capabilities, and made acquisitions that will enhance its product offerings and deepen customer engagement.
