(Reuters) – JPMorgan Chase & Co missed profit estimates for the fourth quarter as a slump in bond trading revenue overpowered strong consumer loan growth and record revenues.
It was the first time JPMorgan Chase, the largest U.S. bank by assets, has underperformed earnings-per-share expectations in 16 quarters, according to Barclays equity analyst Jason Goldberg.
JPMorgan - US - Bank - Finger - Markets
JPMorgan was the second large U.S. bank to point the finger at choppy markets in December for its bond revenue losses. Citigroup Inc on Monday posted a sharp drop in fixed income revenue, blaming widening credit spreads, or the premium investors demand for holding corporate bonds over safer U.S. Treasury securities.
Goldman Sachs and Morgan Stanley , which report earnings later this week, are likely to say they experienced the same effects in their large fixed-income trading businesses.
Well - Fargo - Co - Trading - Tuesday
Well Fargo & Co , which relies less on trading, said on Tuesday that fourth-quarter revenue missed expectations as revenue across all its banking units declined, especially at community banking.
Despite an 18 percent drop in JPMorgan’s quarterly fixed-income revenue, Chief Financial Officer Marianne Lake said one down quarter does not make a trend.
Outlook - Growth - Economy - Analyst - Call
“The outlook for growth in the economy is still strong,” she said on an analyst call. “The consumer is still strong and healthy. We are expecting to see maybe slower but still global growth going forward.”
Its shares were up 1.3 percent to $102.30 on Tuesday.
Bank - Provision - Credit - Losses - Year
The bank increased its provision for credit losses by $240 million from a year earlier, with roughly two-thirds for commercial and industrial loans.
Lake said the rise in provisions were “driven by literally a handful of names across a...
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