JPMorgan posts record annual profits as major US banks thrive in the final quarter of 2024

[January 16, 2025]  By MATT OTT

WASHINGTON (AP) — JPMorgan’s net income soared 50% to more than $14 billion in the fourth quarter as the bank’s profit and revenue easily beat Wall Street forecasts, and other major banks reported banner earnings for the year as businesses and consumers continued to spend despite elevated interest rates.

JPMorgan's earnings per share rose to $4.81 from $3.04 a year ago. The result beat Wall Street profit projections of $4.09 a share, according to the data firm FactSet. Total managed revenue hit $43.7 billion, up 10%, from $39.9 billion a year ago. Wall Street was expecting revenue of $41.9 billion.

JPMorgan posted a record $54 billion profit for the year, or $18.22 per share, adjusted for one-time expenses.

JPMorgan shares rose just less than 1% in morning trading.

Citigroup, Wells Fargo and Goldman Sachs also issued strong results on Wednesday.

The country’s biggest banks have benefitted from higher interest rates for the last two years, when the Federal Reserve jacked up rates to combat the inflation that took root in the wake of the COVID-19 pandemic.

The government’s latest consumer prices report, also issued Wednesday, showed that prices for many essentials rose, pushing the consumer price index to 2.9% in December, the highest it has been since July. But underlying inflation trends — watched closely by the Fed — slowed to 3.2% in December, better than analysts expected and a good sign for consumers and the broader economy.

That, combined with the strong bank earnings, boosted markets, with the S&P 500 and Dow Jones Industrials each climbing 1.7% and the technology-heavy Nasdaq gaining 2.2%.

As great as 2024 was for markets, bank stocks did even better, despite the Federal Reserve trimming its benchmark interest rate three times between September and December.

When it issued its last cut in December, the Fed also trimmed its forecast for 2025 rate cuts to two from four as inflation remained stubbornly above the Fed’s 2% target. That sent markets into a mini-slump, but not enough to dampen what was a spectacular 2024 run. The S&P gained 23% last year, the Nasdaq climbed more than 28% and the Dow finished up nearly 13%.

As for the banks, Goldman Sachs shares finished 2024 48% higher, while JPMorgan enjoyed a 41% gain and Wells Fargo shares climbed 43%.

JPMorgan reported Wednesday that its interest income fell 3% to $23.5 billion, thanks to a downtick in interest rates.

CEO Jamie Dimon said the bank got a boost from investment banking business, where fees rose 49% and markets revenue jumped 21%. The bank’s consumer banking business also thrived, with clients opening nearly 2 million checking accounts.

The New York bank set aside $2.6 billion to cover bad loans, down slightly from the same period a year ago.

Dimon said the U.S. economy remains strong, noting the nation's low unemployment and strong consumer spending.

Pedestrians approach JP Morgan Chase headquarters, Wednesday, Dec. 29, 2023, in New York. (AP Photo/Peter Morgan, File)

“Businesses are more optimistic about the economy, and they are encouraged by expectations for a more pro-growth agenda and improved collaboration between government and business,” said, alluding to the incoming Trump administration which has promised to cut regulations across industries.

Dimon said that any regulation should balance promoting growth and keeping the banking system safe.

“This is not about weakening regulation ... but rather about setting rules that are transparent, fair and holistic in their approach and based on rigorous data analysis, so that banks can play their critical role in the economy and markets.”

Dimon, however, said that the state of the geopolitics “remains the most dangerous and complicated since World War II” and that JPMorgan is preparing for a wide range of outcomes.

JPMorgan announced this week that Dimon’s top deputy, Daniel Pinto, would step away from his position as president and chief operating officer at the end of June and retire at the end of 2026. Jennifer Piepszak, co-CEO of the bank’s commercial and investment bank division, will take over the COO role with Pinto’s guidance.

After Dimon said last spring that he expected to retire within five years, it was presumed that Pinto, who has worked for the bank for more than 40 years, would take over as the bank’s top executive.

A spokesman for the bank said Tuesday that Piepszak was not currently interested in the CEO role when Dimon exits, potentially opening the door for another of the bank’s executive leadership to fill the role when it eventually opens.

Wells Fargo also topped profit expectations Wednesday with a nearly 50% jump in net income, to $5.1 billion in the fourth quarter, or $1.43 per share. Revenue came in at $20.4 billion, a touch lower than expectations. In the same quarter a year ago, Wells earned $3.4 billion, or 86 cents per share, on $20.5 billion in revenue.

In September, Wells Fargo agreed to work with U.S. bank regulators to shore up its financial crimes risk management, including internal controls related to suspicious activity and money laundering. The agreement came just seven months after the Biden Administration lifted a consent order on the bank that had been in place since 2016 following a series of scandals, including the opening of fake customer accounts.

Wells rose 5.3% in early trading.

Citigroup climbed 5.7% and Goldman Sachs gained 5.4% after both banks beat Wall Street profit forecasts. Goldman said its global banking and markets business generated nearly $35 billion in revenue, driven by strong performances from equities and investment banking.

Goldman claimed to lead all global firms in mergers and acquisitions in 2024.

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