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Bank Earnings Season 2014: JP Morgan scores a tepid Q4 as Fixed income yields crash the 2% floor

Full year Net Income crossed $21.8 Billion for an earnings rush of $5.29 but Q4 remained a low $$1.19 per share as the bank clamed to have come out as #1 in Investment Banking advisory in a busy year, riding a good year in Europe and the Middle East (Africa) on low volumes rising smartly in the dark continent.

The $100 mln Forex settlement of civil lawsuits , counted for some of the $990 mln more in legal costs after its jumbo settlement in September, and buybacks were a busy desk job at the bank as shares plunged in the last quarter, raising the year’s treasury charges on the account to $10 Billion. The third quarter included $660mln with 5 other banks to settle with regulators in US UK and Swiss on similar charges of manipulation

The Fourth Quarter earnings are a dip from the same quarter last year and is currently the headline item of earnings reports in the pre open as shares cruise 3% lower on the 8.5% downtick. The Wall street leader is likely going to target a clean $100 Billion in Revenues in 2015 as we go into the earnings webcast in an hour from now.

Fixed Income markets scored another abysmal $2.5 Bln in volumes at the giant, and equities another $1.1 Bln in the low ranking Q4.

Meanwhile even as individual segments reported lower business and Net revenues, Non operating expenses at the Consumer Banking unit counted almost a $1 Bln lower at $6.4 Bln with reduced costs in Mortgage Banking.

FY14JPMThe bank has almost restarted originations in mortgages from a 0 score a couple of quarters back. Higher volumes int he fourth quarter at above 8% in deposits and loans however came at a much lower RoE of 16% after a 25% break in Q2. Business Banking loans are up 6% on last year.  Originations (Mortgages) were up to $23 Bln a hefty 8% rise sequentially

Credit Card business (period end) was stolid at $131 bln and sales volume up 10% on year at above $120 Bln. Auto loanss were also up 8% for the final quarter but stayed in the $6-7 Bln range,. Servicing revenues were stuck again after an initial move on reductions in headcount and net revenues from the business also fell in the year

Excluding Mortgages and Cards, Consumer Banking was up 8% to $4.6 bln with NII at $2.7 Bln

FY14 JPMCIB

CIB Net Income halved at the bank as expenses were not down commensurate with the $2 Bln drop in revenues. Revenues of $7.38 Bln were still up 20% over the same quarter last year, including Fee income of $1.8 Bln an improvement on prior quarters, but equally meaty for other Wall Street residents

Securities Transaction Services were back from the brink with the trading business in a 38% resurgence to $4.3 bln in the quarter (Markets and Investor Services) at the abysmal FI and equity trading levels that were expected to jump across the year but remained comparably better only in the first and the final quarters.

FY14 JPMComB

The Full year score is an improvement from the sharp recovery in legal costs draining the bank till 2013 and a full year Net Income of $21 Bln still comes at a Income Expense ratio of 60%

FY14JPM fullyear

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This entry was posted on January 14, 2015 by in Uncategorized.

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