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JPMorgan beats profit estimates on better-than-expected credit, trading revenue

Jamie Dimon, CEO of JP Morgan Chase, appears on CNBC’s Squawk Box at the 2020 World Economic Forum in Davos, Switzerland on Jan. 22nd, 2020.

Adam Galica | CNBC

JPMorgan Chase beat analysts’ estimates for fourth-quarter profit on better-than-expected trading results and a boost from releasing money previously set aside for loan losses.

The company posted earnings of $3.79 a share, exceeding the $2.62 per share estimate of analysts surveyed by Refinitiv. The bank would’ve beat estimates even without the 72 cent EPS boost from credit-reserve releases. The firm generated $30.16 billion in revenue, exceeding the $28.7 billion estimate.

“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,” CEO Jamie Dimon said in a statement.

A bright spot in 2020 for Wall Street has been trading, which is expected to be the best year since the financial crisis in terms of total revenues, thanks to the Federal Reserve’s unprecedented actions to prop up markets. Investment bankers also benefited as wide-open markets brought surging demand for IPOs and a record spate of debt issuance.

Last month, CEO Jamie Dimon said he expected fourth-quarter trading and investment banking revenue to be 20% higher than a year earlier.

Analysts may ask Dimon about succession planning after a health scare he had last year. While widely reported that Dimon had heart surgery last March, he only recently told the Wall Street Journal that his condition was so precarious he thought he “might not make it.”

Analysts will also be curious about the pace of share repurchases the bank is expecting to make. JPMorgan announced a $30 billion share repurchase program last month after the Federal Reserve said that the industry could restart buybacks in the first quarter.

Shares of JPMorgan slipped 8.7% last year, compared to the 4.3% decline of the KBW Bank Index.

Here are the numbers:

  • Earnings: $3.79 a share, vs. $2.62 per share estimate, according to Refinitiv.
  • Revenue: $30.16 billion, vs. $28.70 billion expected, according to Refinitiv.

    This story is developing. Please check back for updates.

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