JPMorgan Chase reported fourth quarter earnings that topped analysts’ estimates, thanks to record trading performance and the effect of releasing funds previously set aside for loan losses.
The banking behemoth’s earnings for the quarter came in at $3.79 a share, surpassing the $2.62 per share estimate of analysts surveyed by Refinitiv. Three was a 72 cent per share boost from credit-reserve releases.
Revenue of $30.16 billion also exceeded the $28.7 billion expected by analysts.
JP Morgan experienced a record fourth quarter in its trading segment. Equities trading revenue of $1.99 billion exceeded the $1.84 billion estimate from analysts surveyed by Refinitiv. Fixed income revenue of $3.95 billion was just below the $4.12 billion estimate.
CEO Jamie Dimon mentioned news of effective coronavirus vaccines and fresh round of government stimulus as reasons for taking down the bank’s reserves. According to the company, it released $2.9 billion from its cash reserves set aside for expected loan defaults in the quarter, leading to $1.9 billion boost after around $1 billion in charge-offs.
Last month, JPMorgan announced a $30 billion share buyback program following the Federal Reserve’s nod to big banks on resuming repurchases in the first quarter.