JPMorgan jumps after posting better fourth-quarter results than anyone on Wall Street dreamed

Shares of the largest US bank are moving slightly higher in the premarket after net income soared by 50% in the fourth quarter compared to the same period in 2023.

On many key profitability metrics, JPMorgan not only surpassed the median projection, but exceeded every analyst’s expectation, according to estimates compiled by Bloomberg:

• Adjusted earnings per share: $4.81 (consensus $4.10, high estimate $4.43)

• Net interest income — the spread between the interest payments made by borrowers and how much the bank spends funding its deposits — of $23.35 billion (consensus $22.9 billion, high estimate $23.1 billion)

• Net interest margin — the difference between those aforementioned interest rates — was 2.61% (consensus 2.53%, high estimate 2.58%)

• Investment banking fees of $2.48 billion (consensus $2.41 billion)

• Return on equity — the net income as a share of shareholders’ equity (assets less liabilities) — of 17% (consensus 14.12%, high estimate 15.76%)

• Trading income: $7.05 billion (consensus $6.66 billion, high estimate $6.8 billion)

Figures related to credit quality were a little more mixed: total loans borrowers haven’t made scheduled payments on were higher than any analyst on the Street thought, but the amount of money the bank has given out that it doesn’t expect to get back was basically in line with expectations, and the cash it set aside in reserve to cover these bad loans was lower than anticipated.

The stock was initially trading nearly 4% higher before paring those gains.

“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,” CEO and Chairman Jamie Dimon said.

He did, however, warn that stubborn inflation and fraught geopolitical tensions served as key risks to the outlook.

Oh, and you might recall when shares of the bank and its peers were battered in September when President Daniel Pinto said that analysts’ projections for 2025 net-interest income were “not very reasonable” and “will be lower” than $89.5 billion.

Well, the bank’s guidance for this key metric in 2025 from this morning: about $90 billion, and roughly $94 billion if you include its trading business.