Jamie Dimon, CEO of JP Morgan Chase, appears at CNBC’s Squawk Box at the 2020 World Economic Forum in Davos, Switzerland, on January 22, 2020.
Adam Galica | CNBC
JPMorgan Chase exceeded analysts’ estimates for fourth-quarter earnings on better-than-expected trading results and a boost from the release of previously allocated loan losses.
The company reported earnings of $ 3.79 per share, exceeding the estimate of $ 2.62 per share of analysts surveyed by Refinitiv. The bank would have exceeded estimates even without raising the EPS by 72 cents from the launch of credit reserves. The company generated revenues of $ 30.16 billion, exceeding the estimate of $ 28.7 billion.
The bank released $ 2.9 billion from its pile of cash allocated for defaults in the first quarter, leading to a $ 1.9 billion increase in results after about $ 1 billion in offsets. JPMorgan CEO Jamie Dimon cited the two major developments at the end of 2020 – news of effective coronavirus vaccines and another round of government incentives – as reasons for removing their reserves.
“While positive developments in vaccines and incentives have contributed to these versions of reserves this quarter, our credit reserves of over $ 30 billion continue to reflect significant short-term economic uncertainties and will allow us to withstand a much more economic environment. worse than the current basic forecasts of most economists, “CEO Jamie Dimon said in a statement.
A bright spot was traded in 2020 for Wall Street, which is expected to be the best year since the financial crisis in terms of total revenue, thanks to the unprecedented actions of the Federal Reserve to support markets. Investment bankers also benefited as open markets brought an increase in demand for IPOs and a record period of debt issuance.
Last month, CEO Jamie Dimon said he expected fourth-quarter banking and investment revenues to be 20 percent higher than a year earlier.
Analysts may ask Dimon about planning the succession after a health scare he had last year. Although he widely reported that Dimon had heart surgery last March, he recently told the Wall Street Journal that his condition was so precarious that he thought he “might not.”
Analysts will also be curious about the pace of share buybacks the bank expects to make. JPMorgan announced a $ 30 billion share buyback program last month after the Federal Reserve said the industry could resume buybacks in the first quarter.
JPMorgan shares fell 8.7% last year compared to a 4.3% drop in the KBW Bank index.
Here are the numbers:
- Earnings: $ 3.79 per share, compared to the estimate of $ 2.62 per share, according to Refinitiv.
- Revenue: $ 30.16 billion, compared to $ 28.70 billion expected, according to Refinitiv.
This story is developing. Please check again for updates.