JPMorgan 4Q earnings fall 14%, but 2021 profit sets record

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JPMorgan Chase says fourth-quarter profits fell 14% from a year ago, due to weak performance from its trading desk and higher compensation expenses for employees.

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NEW YORK – JPMorgan Chase says fourth-quarter profits fell 14% from a year ago, due to weak performance from its trading desk and higher compensation expenses for employees.

Even with the weak quarter, JPMorgan had a record annual profit, nearly $50 billion. Before the pandemic, the total is significantly higher than the total brought in by the bank during 2019.

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The bank, like others in the financial industry, continues to deal with the impact of near-zero interest rates. Lower rates have kept JPMorgan’s revenue flat for most of the past year.

The New York-based financial giant on Friday reported profits of $10.4 billion, or $3.33 per share, for the last three months of 2021. That’s down from a profit of $12.14 billion, or $3.79 per share, in the same period a year ago. While JPMorgan’s profits fell, the results were still better than analysts forecast, with an average profit per share of $3.01 on FactSet.

For the past several quarters, JPMorgan has been able to offset flat interest rates by driving strong performance from its investment bank and releasing billions of dollars from its so-called debt-loss reserves. Reserves are the money that the bank sets aside to cover potentially bad loans in the first months of the pandemic. Those debt-loss reserve releases gave the bank a multiple one-time boost in its profits.

Those reserve releases have decreased over the course of the year. JPMorgan issued net debt of $1.3 billion in the fourth quarter, compared to $4.16 billion issued in the first quarter.

For the full year, JPMorgan made a profit of $48.33 billion. This is higher than the $29.1 billion earned by the bank in 2020, which was hit by the pandemic. This is even better than 2019’s profit of $36.4 billion.

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