By Niket Nishant and Nupur Anand
(Reuters) – JPMorgan Chase’s (NYSE: ) annual profit rose to a record as its brokers and dealers reaped windfall gains from a market rally in the fourth quarter, it reported on Wednesday.
The largest US bank also forecast that its net interest income, or the difference between what it earns on loans and pays out on deposits, will rise above analysts’ expectations this year, despite repeated warnings that high NII growth is unsustainable.
JPMorgan’s strong results bode well for the banking sector, which is seeing a resurgence in deal-making and fundraising activity as the U.S. central bank cuts interest rates to bolster the economy. Goldman Sachs’ profits also jumped after a strong quarter for its investment bankers and traders.
“The U.S. economy has been resilient,” JPMorgan CEO Jamie Dimon said, citing low unemployment and healthy consumer spending.
“Businesses are more optimistic about the economy and are encouraged by expectations for a more growth-oriented agenda and improved cooperation between government and business,” Dimon said. However, he cited risks: government spending, inflation and geopolitical conditions.
JPMorgan’s Wall Street business was boosted by a 49% jump in investment banking fees and 21% higher trading revenue in the fourth quarter, beating executives’ December forecast.
Stronger trading in credit, currencies and emerging markets helped the fixed income unit, while a revival in activity in derivatives trading and the cash market helped its equities business.
NII AMPLIFICATION
The bank projects NII of $94 billion in 2025, higher than the $91 billion analysts had predicted, according to estimates compiled by LSEG.
“We were most impressed by the company’s strong revenue growth and importantly, net interest income was quite strong,” said David Wagner, portfolio manager at Aptus Capital Advisors.
“It looks like the giant should continue to see the path of least resistance to go higher.”
However, in the fourth quarter, NII fell 3% to $23.5 billion, the first year-over-year decline since 2021.
“JPMorgan’s earnings were certainly strong … A couple of things that stood out was the fact that JPMorgan’s interest income fell (in the fourth quarter), as we saw depositors continue to demand higher interest rates,” said Octavio Marenzi, executive director of the consulting company Opimas.
Loan growth has been muted despite market and industry optimism, and while credit card business is expected to grow, the pace will be slower than last year, JPMorgan Chief Financial Officer Jeremy Barnum said.
JPMorgan, which is rapidly expanding its workforce, expects the number of employees to be the same in 2025. It has more than 317,000 employees, the most among peers.
The bank’s shares rose almost 3%. They ended 2024 with a gain of nearly 41%, beating the benchmark.
The financial industry could benefit from President-elect Donald Trump’s return to the White House, as his administration is expected to tap regulators that could ease capital rules and merger approvals.
Analysts say the departure of Michael Barr, the Fed’s chief regulatory officer who led efforts to increase capital requirements for big banks, could lead to a softening or rejection of the proposal known as the Basel endgame, which banks have aggressively opposed.
“We have consistently said that regulation should be designed to effectively balance promoting economic growth and maintaining a safe and sound banking system,” Dimon said. “This is not about weakening regulation … but about setting rules that are transparent, fair, holistic in their approach and based on rigorous data analysis.”
JPMorgan’s 2024 profit rose 18% to $58.5 billion. It earned $14 billion, or $4.81 per share, in the fourth quarter, compared with $9.3 billion, or $3.04 per share, a year earlier.
HERITAGE IN FOCUS
Dimon said the bank’s succession schedule has not been affected by one of the leading candidates for CEO, Jennifer Piepszak, who has withdrawn from the race for the time being.
Piepszak will become Chief Operating Officer. She will succeed Daniel Pinto, a top Dimon lieutenant and veteran of four decades at the investment bank, who will retire at the end of 2026.
“It doesn’t change the timeline at all. It’s more of a natural progression,” Dimon said in a post-earnings call.
Dimon, an influential CEO whose 19-year tenure stretches far beyond his peers, has spoken about his plans to retire.
“If you’re talking (about staying on as chief executive) for four to five years or more, I’ll be 69 in March, I think that’s the rational thing to do. I’ve got a few health issues, I just figured it makes a lot of sense,” he added, referencing to its earlier timetable of less than five years.
The director said that succession planning is his most important task. In May last year, he said that the deadlines could be between 2.5 and 4.5 years.
JPMorgan’s board of directors has identified candidates to succeed Dimon. Candidates to succeed him include Marianne Lake, executive director of consumer and community banking, Troy Rohrbaugh, co-head of commercial and investment banking and Mary Erdoes, executive director of asset and wealth management.
