The Banking and Strategy Initiative

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2015 Bank Earnings Season: JP Morgan comes out tops at $1.32 for Q4

Anything above $1.30 is creditable for the behemoth in a slow 4th quarter and the bank kept its promise though Citi is expected to slink to the bottom of the pile in earnings tomorrow. Others report next week.

Other commitments kept me out of the Conference call today but Marianne Lake was pretty straight forward about expecting no more than a 15% slough off in trading , while other banks are likely to start worrying about deteriorating delinquency rates in the coming rate rise. The Oil crisis for example got only a 100 odd million in provisioning at JP Morgan, and that is an important reason for the good q4 earnings report today before the market open. The dividends for the year were upto $1.72 a share

As core loans increase for the bank ( not much still homegrown, the wholesale bank actively trading in the loans and buying itself a portfolio as rates make interest income important to keep on their side) the Loan to Deposit ratio is a healthier 65%

The expense ratio was still a tough 57% in Q4 and this is despite the steeply reducing headcount throughout the year and expected ramp up this year with Operating expense reduction still not to the required Income Ratio(Expense ratio) which should be down to low 50s

Consumer loans are thankfully up for most of the growth in Loans and the Fee revenue in Investment Banking fr the year is a respectable $2.2 Billion but not as much as one expected from the bank, as Goldman Sachs and even others swamp it in the lucrative brand business for Wall Street Firms.

The annual Earnings are up to $24.4 Bln for the year and revenues only $96 Bln, and with that as focus, we are just presenting the overall quarterly performance for the bank which had no change from the expected as mortgages remained subdued.

Fixed income saw action back in rate markets, and overall the year has much more to look ahead to in 2016.

Provisions are up to $3.83 Billion for the whole year, and the annual EPS after returning $11 Billion in buybacks at a great $6 per share ($2.6 Bln for the quarter and a dividend this quarter of another $0.44 cents per share)

ROE for the year was a tough 11% but the bank is likely int he swing in 2016 again as Tier 1 capital is reported at 13.5% and CET(Common Equity Tier 1) is  a not easily emulated 11.5%.

For the year, Consumer Banking units scored revenues of $43 Bln, and CIB businesses the other $33 Bln as Commercial Banking stayed even at $7 Bln and asset management was an even $12 Bln

CIB profits were higher on a $1 bln lower in revenues at $8 Bln net income for the businesses

Net yields on loans remain low but the turn in the rate environment may bring good tidings and finally one looks to the commercial banking business to improvve realised spreads on loans as Consumer growth as achieved a better rate in 2015.

The Bank still carries $6.6 Bln in MSRs though losses have stemmed as reported in the 2nd quarter set








This entry was posted on January 14, 2016 by in Uncategorized.


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