ii view: JP Morgan results benefit from record stock markets

Fourth-quarter results to 31 December

• Revenue up 7% to $46.77 billion
• Earnings per share down 4% to $4.63
• Quarterly dividend of $1.50 per share, unchanged from Q3

Chief executive Jamie Dimon said:

“The firm concluded the year with a strong fourth quarter. Each line of business performed well. These results were the product of strong execution, years of investment, a favorable market backdrop and selective deployment of excess capital.

“The US economy has remained resilient. While labour markets have softened, conditions do not appear to be worsening. Meanwhile, consumers continue to spend, and businesses generally remain healthy. These conditions could persist for some time, particularly with ongoing fiscal stimulus, the benefits of deregulation and the Fed’s recent monetary policy.

“However, as usual, we remain vigilant, and markets seem to underappreciate the potential hazards—including from complex geopolitical conditions, the risk of sticky inflation and elevated asset prices.”

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ii round-up:

JPMorgan Chase & Co (NYSE:JPM) today reported quarterly revenue and earnings that beat Wall Street forecasts, aided by buoyant equity markets and growth in average loans on the back of falling interest rates.

Fourth-quarter equity revenues to late December jumped 40% to $2.9 billion, helping drive total revenues up 7% from a year ago to $46.77 billion. Earnings of $4.63 per share was down 4% from Q4 2024, although was $5.23 per share when adjusted for charges linked to JPM's purchase of an Apple Inc (NASDAQ:AAPL) Card loan portfolio from The Goldman Sachs Group Inc (NYSE:GS). Analysts had expected outcomes of $46.2 billion and $5.01 per share respectively.

Shares in the Dow Jones company initially rose marginally then fell 2% having come into these latest results up by just over a third in 2025. That’s similar to rival Wells Fargo & Co (NYSE:WFC). The Dow Jones index rose 13% last year and the broader S&P 500 16%.

Formed in the year 2000 via the merger of JP Morgan and Chase Manhattan, the banking giant today employs over 300,000 people worldwide.

Revenue for the group’s Commercial and Investment Banking division, and including equity trading, climbed 10% from a year ago to $19.4 billion. Bond, or fixed income related revenue rose 7% to $5.4 billion. Investment banking fees fell 5% to $2.3 billion, cooling from growth of 16% in Q3 as M&A activity linked to AI companies eased.

An additional 1.7 million net new current accounts and 10.4 million credit card accounts acquired during 2025 helped boost Consumer and Community Banking revenue by 6% to $19.4 billion.

Record highs achieved by the S&P 500 index during the quarter drove up assets under management at its wealth division by close to fifth year-over-year to $4.8 trillion.

A quarterly dividend payment of $1.50 per share, payable to eligible shareholders on 31 January, is unchanged from the prior quarter. First-quarter results are scheduled for 13 January.

ii view:

Headquartered in New York, JP Morgan Chase competes against rivals including Citigroup Inc (NYSE:C), Morgan Stanley (NYSE:MS) and even UK bank and former buyer of Lehman Brother assets Barclays (LSE:BARC). Geographically, the US generated its biggest slice of revenues in 2024 at 79%. That was followed by the combined Europe, Middle East and Africa regions at 13%, with Latin America and the Caribbean the balance of 2%.

For investors, a full trade deal between the US and China has not yet been agreed, with an unsatisfactory deal potentially bad for US companies and their banks. An estimated price-to-net asset value of around 2.6 times sits comfortably above many rivals, suggesting the shares are not obviously cheap. Comments by President Trump just days ago that credit card interest should be capped at 10% could hinder profits if implemented, while plans for an eventual replacement of CEO Jamie Dimon have yet to be made.

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More favourably, the benefits of a diversified business model have regularly seen strong conditions for one division countering challenges at another. JP Morgan has no direct business in China. The bank's finances remain robust given a capital cushion, or CET1 ratio of 14.5%, while more than 10 years of consecutive annual dividend increases plus a prospective dividend yield close to 2%, are not to be ignored.

On balance, and despite ongoing risks, this bellwether of the US economy continues to justify its place in many already diversified investor portfolios.

Positives:

• Business diversity
• Robust balance sheet

Negatives:

• Economic outlook uncertainty
• Heightened wage costs

The average rating of stock market analysts:

Strong hold