US banking major – JP Morgan Chase declared its fourth quarter results, posting performance that’s better than analyst’s expectations, despite having to release $2 billion from reserves as losses from bad loans narrow further.
Profits jumped to $4.8 billion for the quarter from $3.3 billion, recorded a year earlier. That translates into an Earnings Per Share (EPS) of $1.12, up from last year’s EPS of 74 Cents. Analyst’s poll showed an expected EPS of $1. Revenue was recorded at $26.7 billion, a jump of six percent over last year – same quarter.
Jamie Dimon, the CEO of JP Morgan said: “Although we continue to face challenges, there are signs of stability and growth returning to both the global capital markets and the U.S. economy”.
The bank had made provisions for bad loans by creating a ‘Loan Loss Reserve’ for its credit card business. However, fewer defaults mean that the bank can reduce the reserve by $2 billion, thus adding 30 Cents to EPS.
“The loan-loss reserves are something that bugs me; I would love to see a bank hit their numbers without taking from loan-loss reserves for once”, said Matt McCormick, Banking analyst at Bahl & Gaynor.
The bank’s retail banking unit made a spectacular recovery and posted a profit of $708 million for the quarter against a loss of $399 million, recorded last year.