The biggest US banks have kicked off their Q4 2019 accounts. Over the year, JPMorgan posted the highest revenues in its history, with net profit up 12.2% to $36.4 billion.
Profits boosted by trading and underwriting
The US bank said its Q4 2019 earnings had risen 21% to $8.52 billion, or $2.57 per share compared with $1.98 per share in the same period of 2018. Jamie Dimon, JPMorgan's CEO, says in a statement that stabilizing global growth and the easing of some trade tensions have helped support its business.
More specifically, JPMorgan's net income rose by 9% in the last quarter to $29.2 billion, compared with the $27.87 billion anticipated by analysts. The company benefited in particular from its sales operations, with net income from investment banking jumping 48% to $2.9 billion. Similarly, revenues from bond trading were up 86% to $3.4 billion. Finally, the retail banking division posted earnings of $4.2 billion in the last quarter of 2019, up 5%. While its overall revenues climbed to $14 billion thanks in part to strong results from credit cards and auto loans, core banking revenues fell slightly to $6.4 billion.
The company's commercial bank finally recorded a 9% drop in profits, to $938 million, mainly linked to lower net interest income. Indeed, the end of 2019 was also marked by a further cut in interest rates by the Fed, which had already reduced them in July and September.
A $440 billion valuation
On the stock market, JPMorgan shares gained 2.5%, reaching a record high of $141.1 on January 2. The bank is now valued at $440 billion, making it the world's 10th largest capitalization.
Like JPMorgan, Citigroup did better than expected in terms of earnings and sales, thanks to its bond trading business, which grew by 49% over the same period. Meanwhile, Wells Fargo, one of America's banking giants, saw its quarterly profit plummet by 55%, weighed down by several scandals concerning the forced sale of credit cards. On Wall Street, investors are hoping for a marked improvement in corporate earnings for 2020.