JPMorgan profit beats estimates on M&A boost

JPMorgan Chase & Co reported a 14% fall in fourth-quarter earnings on Friday but sailed past analysts’ estimates, helped by a stellar performance at its investment banking unit that offset a slowdown in its trading arm.

The country’s largest lender, whose fortunes are often seen as a barometer of the health of the U.S. economy, posted a profit of $10.4 billion, or $3.33 per share, in the quarter ended Dec. 31, compared with $12.1 billion, or $3.79 per share, a year earlier.

Analysts on average had expected earnings of $3.01 per share, according to Refinitiv.

JPMorgan’s trading shortfall was cushioned by yet another strong quarter for its investment bank as global mergers and acquisitions activity shattered all-time records in 2021.

Wall Street banking remained strong for most of the past year, as large, cash-flush financial sponsors and corporates embarked on a dealmaking spree, helping drive up investment banking fees to their highest-ever levels.

Large U.S. lenders have benefited from higher consumer spending, while their trading arms gained from exceptional volatility in financial markets last year. However, soaring inflation and a potential Omicron-induced economic slowdown are set to challenge profit growth in the coming months.

Other large U.S. banks including Citigroup and Wells Fargo will also report results on Friday. Goldman Sachs , Wall Street’s premier investment bank, will report earnings on Tuesday, while Morgan Stanley and Bank of America round out the earnings season on Wednesday.

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