JPMorgan Chase (NYSE: JPM) has just released fourth-quarter earnings. The Foolish upshot? There's little to complain about, much to celebrate, and one unusual number that will unexpectedly leave the superbank $10 million ahead -- much to the financial dismay of a certain silver-haired CEO.
1. Record net-profits three years in a row
JPMorgan is reporting fourth-quarter net income of $5.7 billion, up from $3.7 billion a year earlier, for a whopping year-over-year increase of 54%. From an earnings-per-share perspective, that's $1.39, up from $0.90 the year earlier. Total revenue was up as well, to $24.4 billion for the quarter: a 10% rise from the previous year. What's it all down to?
2. Back to basics
The bank is reporting strong performance across all its lines of business:
- Deposits are up 10% in retail and business banking.
- Mortgage originations are up by 33%, for a total of $51.2 billion.
- Credit-card sales volume is up by 9%.
- Asset management is reporting its 15th consecutive quarter of positive net long-term client flows, with record loan balances of $80.2 billion.
And what about that mystery $10 million credit mentioned earlier?
3. Dimon gets docked
The Jamie will lose half of his $20 million pay package due to the unflattering results of an internal report on the London Whale, which was presented to the board on Wednesday. According to the report: "He could have better tested his reliance on what he was told ... [but] ...he responded forcefully" once he was aware of the issue.
Final Foolish takeaway
And after an initial drop this morning, JPMorgan's stock is right about where it closed yesterday, $46.36. But while the market seems nonplussed, I don't think you should be.
Rejoice, Fools. JPMorgan is making money hand over fist. Most importantly, it's doing it the right way: building deposits, lending money, and managing assets. Sure, investment banking is still in the mix, but it's not driving profits.
The $10 million hit to Dimon's checking account is steep -- steeper than I thought it would be, but in the end, it's good he's being held accountable in a significant way. Dimon has doubled down on risk and shaken top management to the core since the London Whale, and I expect we won't be hearing too much about that pesky marine mammal after this. If investors got nothing else out of this fourth-quarter report, that would have been enough.
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