The slowdown in the fourth quarter didn’t stop the bank from setting a record for annual profit. The nation’s biggest bank earned $48.3 billion in 2021, compared with the pre-pandemic high of $36.4 billion in 2019. The recovering economy, raucous markets and frantic merger volumes drove fees to new highs.
Also, JPMorgan last year freed $9 billion that it had set aside for pandemic loan defaults, which didn’t materialize. In 2020 it had set aside $19 billion.
Fourth-quarter profit was $10.4 billion, or $3.33 a share, better than Wall Street’s expectation for $3.01 a share, according to FactSet.
Revenue was roughly flat at $29.3 billion, compared with the $29.8 billion analysts had expected. Full-year revenue also hit a record, rising 1% to $121.6 billion, with the investment bank, commercial bank and asset and wealth management division all notching their best years ever.
In the corporate and investment bank, fourth-quarter revenue rose 2% to $11.5 billion. Surging investment banking fees more than offset a slowdown from the boom in trading revenue.
Fourth-quarter revenue in the consumer bank fell 4% to $12.3 billion.
Shares were falling in premarket trading, down about 3% to $163.12.
Loans increased from the prior year for both consumer and wholesale customers. Friday, JPMorgan said it was predicting single-digit loan growth in 2022.
Spending on credit cards rose 29% and card loans increased 7%. Mortgage originations rose 30%.
Net-interest margin, a measure of what the bank makes on loans minus what it pays on deposits, ticked up to 1.63% from 1.62% in the third quarter, the first increase since the pandemic began in 2020.
That trend will continue if the Federal Reserve raises rates this year as expected. The Fed signaled last week that it could raise rates as soon as March. That, along with hopes for loan growth, should offset a slowdown in markets revenue.
Trading, which powered the investment bank for the past two years, is coming off its frantic pace. JPMorgan said Friday that its fourth-quarter trading revenue fell 11% from the year earlier, with fixed income trading down 16% and equities trading down 2%. Executives have said they expect a further retreat toward 2019 levels in coming months.
Fees from advisory work rose 86% on a merger boom. Fees from issuing debt and equity rose 14% and 12%, respectively.
In asset and wealth management, revenue rose 16% to $4.47 billion and hit an annual high of $17 billion, as assets under management climbed and clients increased borrowing.
The commercial bank also benefited from clients striking deals. Its revenue rose 6% to $2.6 billion for the quarter and 7% for the year.
Operating expenses were up 11% to $17.9 billion, with the bank citing higher compensation.