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JPMorgan Chase (JPM) 4Q Earnings Jump On Strong Lending, Deposit Growth

 January 16, 2013 07:19 AM

(By Balachander) JPMorgan Chase & Co. (NYSE: JPM), the banking giant, posted a jump in quarterly earnings, reflecting strong lending and deposit growth.

Earnings per share jumped 54 percent to $1.39 from $0.90 and net income too rose 54 percent to $5.7 billion in the fourth quarter. Quarterly earnings included items: benefits totaling 27 cents, pretax loss of 9 cents and 14 cents related to pretax expense.

On a sequential basis, earnings were flat.

Net revenue on a managed basis was $24.38 billion, up 10 percent from the same period last year and down 6 percent from the prior quarter.

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"The Firm's results reflected strong underlying performance across virtually all our businesses for the fourth quarter and the full year, with strong lending and deposit growth," commented JPM CEO Jamie Dimon.

Wall Street analysts, on average, expected EPS of $1.16 on revenue growth of 10 percent to $24.42 billion.

Banking revenue jumped 33 percent from the fourth quarter of last year.

The provision for credit losses dropped 70 percent and 63 percent from the fourth quarter of 2011 and previous quarter, respectively.

Mortgage Banking originations increased 33 percent and Credit Card sales volume rose 9 percent compared with the prior-year quarter. Commercial Banking grew loan balances for the tenth straight quarter, rising 14 percent.

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The New York-based banking giant estimates that its Basel III Tier 1 common ratio was 8.4 percent at the end of the quarter ended September, up from 7.9 percent in the previous quarter.

Basel I Tier 1 Common ratio was 11 percent at the end of fourth quarter, compared with 10.4 percent at in the third quarter.

The bank estimates that Basel III Tier 1 common ratio was roughly 8.7 percent at the end of the fourth quarter, up from 8.4 percent in the prior quarter.

For the third quarter, J.P. Morgan's net income rose 33 percent and net revenue 6 percent. The provision for credit losses dropped 26 percent.

Wells Fargo & Co. (NYSE: WFC) had last week reported an increase in quarterly earnings and revenue, while posting lower net interest margin.

JPM shares, which has been trading between $30.83 and $46.49 over the past year, closed Tuesday's regular trading at $46.35.

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