Driven by a strong economy and cuts to the interest rate, JPMorgan Chase has experienced record annual profits as traders and dealmakers made the most of rebounding markets in the fourth quarter to secure windfall profits.
The bank’s net interest income forecast also rose above analysts’ expectations despite repeated warnings that high NII growth was unsustainable. NII did fall three percent to $23.5 billion, which was the first year-over-year decline since 2021.
This resilience signals optimism for the banking sector in the wake of cuts to the interest rate and stronger investment banking activity. Loan growth, however, has slowed despite the optimism.
For JPMorgan, its Wall Street operations grew on the back of a 49 percent increase in investment-banking fees and a 21 percent higher trading revenue in the closing quarter. This was supported by stronger trading in credit, currencies, and emerging markets, which helped the fixed-income unit, while derivatives trading and cash markets helped the equities side of the equation.
Its credit card business is also expected to grow, though it will do so at a slower pace than last year. Likewise, its rapidly expanded workforce will pause in the coming year, with its employee headcount of 317,000 the highest amongst its peers and competitors.
Shares were up with a nearly 41 percent gain in 2024, outperforming the S&P Benchmark, and profits rose 18 percent to $58.5 billion, $14 billion of which was earned in the fourth quarter.
