JP Morgan’s profit jumped by 42% despite the coronavirus pandemic
JPMorgan Chase & Co., the United States’ largest bank by assets, said its fourth-quarter profits jumped by 42% from a year earlier. The firm’s investment banking division had a remarkable quarter, and its balance sheet improved despite the coronavirus pandemic currently rampaging the world.
The New York-based bank said it earned a profit of $12.14 billion, or $3.79 per share, up from a profit of $8.52 billion, or $2.57 per share, in the same period a year ago.
Totally, the bank earned $3.07 a share, which is well above the $2.62 per share forecast analysts had for the bank.
Coronavirus funds set aside by the bank helped boost its income
JPMorgan “releasing” some of the funds it set aside last year to cover potential loan losses caused by the coronavirus pandemic and following recession helped the bank’s bottom line.
Various Banks had set aside tens of billions of dollars to cover potentially bad loans, and JPMorgan had been particularly aggressive in setting aside funds early in the pandemic.
The release of funds reflects improvement in the economy—though it’s still not fully recovered from the shutdowns of March and April—and the trillions of dollars in stimulus funds that have flowed to individuals and businesses.
JP Morgan also gained profits from its investment business
The corporate and investment bank posted a profit of $5.35 billion compared with $2.94 billion in the same period a year earlier.
The bank said it saw higher investment banking fees—money banks collect to advise companies ongoing public or buying other companies—as well as higher fees from its trading desks.
“While positive vaccine and stimulus developments contributed to the reserves releases this quarter, our credit reserves of over $30 billion continue to reflect significant near-term economic uncertainty,” said JPMorgan CEO Jamie Dimon in a statement.