15th January 2025 – (New York) JPMorgan Chase achieved a record annual profit as its dealmakers and traders capitalised on a rebound in markets during the fourth quarter, the bank reported on Wednesday. The largest U.S. bank forecast that its net interest income (NII)—the difference between earnings from loans and payouts on deposits—would exceed analysts’ expectations this year, despite ongoing warnings about the sustainability of high NII growth.
The bank’s robust results signal a positive outlook for the banking sector, which is experiencing a resurgence in deal-making and fundraising activities as the U.S. Federal Reserve cuts interest rates to stimulate the economy. Goldman Sachs also reported a significant profit increase following a strong quarter for its investment bankers and traders.
“The U.S. economy has been resilient,” said JPMorgan’s CEO Jamie Dimon, highlighting low unemployment and strong consumer spending. “Businesses are more optimistic about the economy and encouraged by expectations for a more pro-growth agenda and improved collaboration between government and business.” However, he acknowledged ongoing risks, including government spending, inflation, and geopolitical conditions.
JPMorgan’s Wall Street operations benefited from a 49% increase in investment-banking fees and a 21% rise in trading revenue in the fourth quarter, surpassing the forecasts set by executives in December. Stronger trading in credit, currencies, and emerging markets bolstered the fixed-income unit, while a resurgence in derivatives trading and cash market activity enhanced the equities business.
For 2025, the bank anticipates NII of $94 billion, exceeding the $91 billion projected by analysts, according to estimates compiled by LSEG. “We were most impressed with the company’s big revenue beat, and importantly, net interest income was quite strong,” said David Wagner, portfolio manager at Aptus Capital Advisors. “It seems like the behemoth should continue to see the path of least resistance to be higher.”
However, in the fourth quarter, NII fell 3% to $23.5 billion, marking the first year-over-year decline since 2021. Octavio Marenzi, CEO of consulting firm Opimas, noted, “A few things that stood out were the fact that JPMorgan’s interest income declined in Q4, as we saw depositors continue to demand higher interest rates.”
The bank’s shares rose 1.8% in premarket trading, concluding 2024 with a nearly 41% gain, outperforming the benchmark S&P 500 index. The financial industry may also benefit from President-elect Donald Trump’s return to the White House, as his administration is expected to appoint regulators who might ease capital rules and merger approvals.
Analysts suggest that the departure of Michael Barr, the Fed’s top regulatory official who pushed for increased capital requirements on large banks, could soften or even eliminate a proposal known as the Basel endgame, which banks have vigorously opposed. Dimon stated, “We have consistently said that regulation should be designed to effectively balance promoting economic growth and maintaining a safe and sound banking system. This is not about weakening regulation…but rather about setting rules that are transparent, fair, holistic in their approach and based on rigorous data analysis.”
For 2024, JPMorgan’s profit rose 18% to $58.5 billion. In the fourth quarter, it earned $14 billion, or $4.81 per share, compared to $9.3 billion, or $3.04 per share, a year earlier.
In terms of succession, Dimon indicated that the bank’s timeline remains unaffected by Jennifer Piepszak, a leading contender for the CEO role, temporarily stepping back from consideration. Piepszak will assume the role of chief operating officer, succeeding Daniel Pinto, Dimon’s long-time deputy, who plans to retire at the end of 2026. “It doesn’t change the timeline at all. That’s more of a natural progression,” Dimon remarked during a post-earnings call with reporters.
JPMorgan’s board has already identified candidates to succeed Dimon, who has led the bank for 19 years. He has described succession planning as his most critical task, stating in May that the timeline for transition is between 2.5 and 4.5 years. Contenders include Marianne Lake, CEO of consumer and community banking, Troy Rohrbaugh, co-head of the commercial and investment bank, and Mary Erdoes, CEO of asset and wealth management.
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