JP Morgan blows doors off analysts' Q4 estimates
Banking heavyweight JP Morgan blew past analysts' forecasts for the fourth quarter as the lender released $2.9bn of reserves on the back of the improved outlook.
Nonetheless, commenting on the results, chief Jamie Dimon cautioned that while reserve calculations were done "extremely diligently and carefully", such work now included "multiple" longer-term assumptions which may or not pan out and thus result in volatility in JP Morgan's quarterly earnings going forwards.
"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," he added.
Fourth quarter earnings per share at the largest US lender and investment bank by market capitalisation surged 47.4% to reach $3.79 (consensus: $2.62).
The year-on-year rate of topline growth meanwhile clocked in at 3.4% to reach $28.67bn (consensus: $28.67bn).
Net interest income however slipped 7% to $13.4bn, although that too was ahead of analysts' estimates for $13.3bn, even if only slightly so.
Dimon also highlighted that with capital of more than $200bn at the start of 2021, JP Morgan was well placed to continue investing in the business and the communities that it was a part of while returning capital to its shareholders.
During the fourth quarter, the lender raised more than $2trn for consumer and institutional clients globally while adding a net $12bn to its credit reserves.
JP Morgan finished the quarter with a common equity Tier1 capital ratio of 13.1%, versus 12.4% one year before.