JPMorgan Chase (JPM.US) Q4 Investment Banking Revenue Unexpectedly Declines, Bond Underwriting Performance Drags Down Results.

The largest bank in the United States, JPMorgan Chase (JPM.US), unexpectedly saw a decline in investment banking revenue in the fourth quarter, failing to meet the performance guidance released by the bank last month. The bank released its fourth-quarter earnings report on Tuesday, showing that under Non-GAAP standards, Q4 revenue grew by 7% year-on-year to $46.77 billion, exceeding market expectations by $520 million; Non-GAAP earnings per share were $5.23, exceeding market expectations by $0.37. JPMorgan Chase kicked off the current round of bank earnings season on Tuesday. Bank of America Corp, Wells Fargo & Company, Citigroup, Goldman Sachs Group, Inc., and Morgan Stanley, among other banking giants, are scheduled to release their earnings reports on Wednesday and Thursday. Under the push of Trump's policy adjustments, the industry is expected to record the second-highest annual profit in history. According to the earnings report released on Tuesday, JPMorgan Chase achieved investment banking revenue of $2.35 billion in the last quarter of 2025, a 5% decrease from the same period last year. The bank had previously expected this revenue to achieve "low single-digit percentage growth" in December last year. The weak performance of the investment bank was mainly due to an unexpected 2% decline in bond underwriting revenue, while analysts had generally expected this revenue to grow by 19%. CEO Jamie Dimon said in the earnings statement, "The U.S. economy continues to show resilience, despite some weakness in the labor market, there are no signs of deterioration. At the same time, consumers continue to spend, and overall business operations are healthy." Dimon said this situation "may continue for some time." JPMorgan Chase achieved a net profit of $57 billion in 2025, failing to surpass the record highest annual profit in the history of Bank of America Corp set in 2024. In the fourth quarter, the bank's trading revenue reached $8.24 billion, exceeding the upper limit of analysts' estimates, and both the equities and fixed income trading departments outperformed market expectations. This marked a successful end to several quarters of strong performance last year, driving the business to achieve a record high total revenue for the year. The performance of the investment bank was mainly affected by an unexpected 2% decline in debt underwriting revenue, while the market had previously expected this revenue to increase by 19%. Based in New York, JPMorgan Chase has already risen 33% in the past year, and as of the time of writing, the stock rose by 0.4% in pre-market trading. The bank's net interest income performed strongly. In the first three quarters of last year, large banks expanded their loan portfolios at the fastest pace since the financial crisis, which strongly contributed to net interest income growth. JPMorgan Chase's loan balance in the fourth quarter increased by 3% from the previous quarter to $1.5 trillion, and net interest income rose by 7% year-on-year to $25.1 billion. The bank also reiterated its expectation that full-year expenses in 2026 will reach approximately $105 billion. Last month, at an industry conference, Maryanne Lake, head of consumer and community banking, hinted at this outlook that exceeded analyst expectations, attributing it to "expenses related to business growth." It is worth mentioning that the bank set aside $2.2 billion for a project in partnership with Apple Inc. JPMorgan Chase announced last week that it will replace Goldman Sachs Group, Inc. as Apple Inc.'s new partner for the credit card business. Although the transition period is expected to take about two years, the bank confirmed credit loss provisions of $2.2 billion for this transaction in the fourth quarter. Overall, the bank increased its total provision for potential bad loans by $2.1 billion in the last three months of last year, in line with market expectations.