For JPMorgan Chase (NYSE:JPM), the latest quarter was definitely strong, with record earnings. However, Wall Street expected this and, as a result, the stock price was up only $0.04 to $48.43. The problem: The retail business is diluting growth.

In the fourth quarter, net income surged 68% to $4.53 billion, or $1.26 per share. Keep in mind that there was a nice boost from the sale of its Corporate Trust business to the Bank of New York (NYSE:BK). Excluding this, the net income would have been a more restrained $1.09 per share.

JPMorgan also posted a 19% increase in revenues to $16.05 billion. Additionally, the company continues to benefit from the growth in worldwide mergers and acquisitions. For example, the investment banking division saw a 51% increase in net income to $1.01 billion and revenues increased 48% to $4.72 billion.

It looks like the momentum should continue, as seen with the standout performances of companies like Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS).

Unfortunately, JPMorgan's retail financial services business is showing weakness; there was an 11% fall in net income to $718 million. Moreover, the company took a charge of $233 million because of loan losses in its mortgage portfolio. There was also a 66% annual increase for the provision for credit losses to $262 million. In other words, some of its customers are having trouble paying back loans.

JPMorgan is a massive financial conglomerate. And while the company benefits from diversification, that also puts a cap on growth. What's more, its massive size is another impediment for growth -- the proverbial "law of big numbers." (This is also the dilemma for Citigroup (NYSE:C).)

The way to push growth is through transformative acquisitions. Of course, JPMorgan's CEO, Jamie Dimon, has spent the past two years integrating the Bank One deal. And with the integration mostly done, Dimon may strike another mega-deal.

However, such deals are extremely complex (despite Dimon's experience) and have a so-so track record. Despite JPMorgan's diversified model, there is certainly risk for investors.

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Fool contributor Tom Taulli does not own shares of companies mentioned in this article. He is ranked 1,623 out of 19,864 players in Motley Fool CAPS.