JPMorgan Chase & Co has today posted its biggest-ever annual profit as its bond trading business bounced back in the last three months of the year, setting an upbeat tone for the big US banks reporting this week.
Revenue rose at all but one of JPMorgan's four main businesses, with the bank's commercial banking business the only was to record a decline in revenue.
Revenue from bond trading jumped 86% from a year earlier when financial markets were suffering from a selloff triggered by concerns over trade and global growth.
Revenue from equity markets rose 15% to $1.5 billion in the three months to the end of December.
"While we face a continued high level of complex geopolitical issues, global growth stabilised, albeit at a lower level, and resolution of some trade issues helped support client and market activity towards the end of the year," JPMorgan's chief executive Jamie Dimon said in a statement.
Rival Citigroup also benefited from easier comparisons from a year earlier, posting a 49% rise in bond trading revenue.
Overall revenue at JPMorgan's corporate and investment banking unit, which houses its trading and underwriting businesses, jumped 31% to $9.47 billion.
The consumer business was hurt mainly by lower deposit margins due to low interest rates that meant the bank earned less on deposits it loaned out. Home lending revenue was down 5% to $1.3 billion.
Total loans, excluding home lending, rose 3% in the quarter. Home loans were down 17%.
Deposits flowed into the consumer bank in the fourth quarter, helping offset a decline in loans, as Chase opened around 100 new bank branches last year, many in new cities where the bank previously had not been located.
It said that deposits grew 5% compared to a year ago.
Jamie Dimon said the US consumer continued to be in a strong position.
"Their wages are up, their assets are up, their investments are up, their home values are up," he said on a call with reporters.
The bank said its net income rose to $8.52 billion, or $2.57 per share, in the quarter ended December 31, from $7.07 billion, or $1.98 per share, a year earlier. Net revenue rose 9% to $29.21 billion.
Analysts on average had expected the bank to earn $2.35 per share on revenue of $27.94 billion, according to Refinitiv data.
"Results were above our expectations on better trading results and slightly better net interest income. Bottom line, stock should be up today on the strong revenue beat," said analysts at Keefe, Bruyette & Woods in a note to clients.
The bank said its net interest income fell 2% to $14.3 billion in the final quarter of 2019.