One of the mainstays of the banking community in the United States has a bit of a cloud over it Tuesday morning.
J.P. Morgan Chase (NYSE:JPM) posted quarterly profit below analysts’ expectations for the first time in 15 quarters on weaker-than-expected bond-trading revenue.
The bank generated $1.98 per share in profit for the fourth quarter of 2018, below the $2.20 per share average estimate of analysts. The biggest shortfall appeared to come from the New York-based bank’s trading division, where fixed-income trading produced $1.86 billion in revenue, compared to the $2.2 billion estimate. The firm set aside $1.55 billion for credit losses, higher than analysts’ $1.3-billion estimate.
"Despite a challenging quarter, we grew markets revenue in the investment bank for the year with record performance in equities and solid performance in fixed income," CEO Jamie Dimon said in the earnings release.
Even so, the bank noted that its $7.1 billion in profit, a nearly 70% increase from the year earlier, was a fourth-quarter record. Company-wide revenue rose 4% to $26.8 billion, just under analysts’ $26.84-billion estimate. Non-interest expenses rose 6% to $15.7 billion, slightly higher than analysts’ $15.6-billion estimate.
Bank stocks were pummeled last year, particularly in the fourth quarter, on fears that a recession could be on the horizon, meaning rising losses across consumer and corporate loans. It was a comedown after the U.S. tax overhaul meant banks would produce billions of dollars more in profit in 2018, setting expectations for a rally in bank shares.
Shares opened Tuesday morning down $1.31, or 1.3%, to $99.65
