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JP Morgan Financial Earnings Rallied


JPMorgan Chase & Co, the banking giant stated on Thursday that its fourth- quarter revenues increase 9% from a year before, assisted by strong performance in its consumer banking division and lower legal expenditures.

The biggest U.S. bank by properties said it made $4.91 billion, or $1.32 per share, after payments to chosen shareholders, compared to a profit of $4.49 billion, or a $1.19 per share, a year before. The outcomes topped analysts predictions, who were looking for JPMorgan to earn $1.26 per share, according to sources.

JPMorgans current outcomes reflected similar themes CEO Jamie Dimon and the banks management have been pushing for several quarters.

The bank stayed dedicated on cutting expenditures, including complete layoffs or other headcount reduction,preparing itself for bigger revenues once interest rates increase more, as many anticipate will take place this year. The banks total employees dropped 3% YoY to 234,598 workers.

The bank was also squeezed by a sharp decline in prices for oil and other commodities. JPMorgan had to simply add to its credit reserves to cover loans to oil and gas firms, who have been stressed as oil dipped near $30 a barrel, also the loans to metal and mining companies.

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Dimon emphasizes that the weakening in oil and commodities should be handle as a sign of caution, but not of great fear.

"So obviously (the U.S. economy) going to get a little bit worse. Were not forecasting a recession. We think that the U.S. economy looks pretty good at this point," Dimon stated in a call with investors.

JPMorgans chief financial officer, Marianne Lake stated that the bank is expected to reserve more money to cover oil and gas loans, if oil prices continue to struggle. “The amount is small, possibly $500 million to $750 million,” Lake stated in a conference call with reporters.

JPMorgans consumer bank, the companys biggest division of profit and revenue, reported strong outcomes. Chase gained $2.41 billion, up 10% from a year before. The bank grew both deposits and loans in the quarter. Particularly, auto lending was up 33% from a year ago. Credit cards also did good, as customers used up more on JPMorgans credit and debit cards and lower delinquencies and charge-offs

The investment and corporate banking division reported a increase in profits as well, but it was mainly tied to lower expenses. The unstable stock and bond markets bond in the last part of the year made trading extra difficult, and JPMorgan noted a small decline in both its equity and fixed income revenues from a year before. The division produced $1.75 billion in the quarter in comparison with $776 million a year earlier.

JPMorgan cuts expenditures two ways in its investment bank. Compared with $1.1 billion a year earlier, legal expenses fell to $644 million and the banks employee compensation expenses drop from $2.02 billion to $1.86 billion. The lower compensation expenses is an indication the bank set aside less for year-end bonuses this year, possibly a reflection of last years difficult markets.

JPMorgans commercial bank,  this is where an important part of JPMorgans oil and gas lending business rest, was on a big struggle on the banks results this quarter.

The division had returns of $550 million in the quarter, down from $693 million in the quarter a year before. The cash the bank had to set aside for struggling oil and gas loans was mainly the reason for the fall, as commercial banking income was rather flat in the quarter.

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The total income at the bank is $22.89 billion, in comparison with $22.75 billion in the same period a year ago.

For the whole year, JPMorgan earned $22.41 billion, up 12% from a year before.

Shares of JPMorgan increase 86 cents, or 1.5%, to $58.20.

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