Economy Stock

JPMorgan Blasts Q4 Earnings Forecast On $1.9 Billion Credit Provision Gain, Investment Banking Revenues

(thestreet) – JPMorgan Chase  (JPM) – Get Report posted much stronger-than-expected fourth quarter earnings Friday as investment banking profits surged and the group booked a benefit of $1.9 billion from its earlier credit provisions.

JPMorgan said earnings for the three months ending in December were pegged at $3.79 per share, up 47% from the same period last year and well ahead of the Street consensus forecast of $2.62 per share. Group revenues, JPMorgan said, rose 3.4% to $30.2 billion, again ahead of analysts’ estimates of a $28.7 billion tally.

The $1.9 billion benefit was linked to the release of previous credit loan provisions, JPMorgan said, “reflecting an improvement in the macro-economic scenarios and the continued ability of clients to access liquidity and capital markets.”  

“JPMorgan Chase reported strong results in the fourth quarter of 2020, concluding a challenging year where we generated record revenue, benefiting from our diversified business model and dedicated employees,” said CEO Jamie Dimon. “While we reported record profits of $12.1 billion, we do not consider the reserve takedown of $2.9 billion to represent core or recurring profits – essentially reserve calculations, while done extremely diligently and carefully, now involve multiple, multi-year hypothetical probability-adjusted scenarios, which may or may not occur and which can be expected to introduce quarterly volatility in our reserves.”

JPMorgan Chase  (JPM) – Get Report posted much stronger-than-expected fourth quarter earnings Friday as investment banking profits surged and the group booked a benefit of $1.9 billion from its earlier credit provisions.

JPMorgan said earnings for the three months ending in December were pegged at $3.79 per share, up 47% from the same period last year and well ahead of the Street consensus forecast of $2.62 per share. Group revenues, JPMorgan said, rose 3.4% to $30.2 billion, again ahead of analysts’ estimates of a $28.7 billion tally.

The $1.9 billion benefit was linked to the release of previous credit loan provisions, JPMorgan said, “reflecting an improvement in the macro-economic scenarios and the continued ability of clients to access liquidity and capital markets.”  

“JPMorgan Chase reported strong results in the fourth quarter of 2020, concluding a challenging year where we generated record revenue, benefiting from our diversified business model and dedicated employees,” said CEO Jamie Dimon. “While we reported record profits of $12.1 billion, we do not consider the reserve takedown of $2.9 billion to represent core or recurring profits – essentially reserve calculations, while done extremely diligently and carefully, now involve multiple, multi-year hypothetical probability-adjusted scenarios, which may or may not occur and which can be expected to introduce quarterly volatility in our reserves.”

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