JPMorgan’s record-breaking annual profit soars, despite slight dip in quarterly income.

JPMorgan Chase reported its best-ever annual profit and forecast higher-than-expected interest income for 2024, even as its quarterly profit fell. The largest US lender also took a nearly US$3 billion charge to replenish a government deposit insurance fund. CEO Jamie Dimon reiterated his view that the US economy was steady but warned that inflation could be more persistent than expected and rates higher for longer. The bank expects full-year net interest income (NII) of US$90 billion, which was higher than estimates. In the quarter, NII rose 19% to a record of US$24.2 billion. JPMorgan’s investment banking unit had a “robust” pipeline due to a more dovish interest rate environment, and investment banking fees climbed 13% in the quarter. The bank reported a 12% jump in revenue to US$38.57 billion. However, JPMorgan and several major banks are taking a hit to their quarterly profits as they are required to pay a bulk of the US$16 billion to replenish the Federal Deposit Insurance Corporation’s deposit insurance fund (DIF). Average deposits were flat compared with the prior quarter, and consumers have been moving their money out of banks in search of higher-yielding alternatives. The bank said US consumer finances remain largely healthy, but net charge-offs increased to US$2.2 billion in the fourth quarter. JPMorgan’s CFO warned that draft regulations on capital could stymie economic growth and suggested considering action against banking regulators. The bank has previously warned that stricter capital rules proposed by US regulators could increase its capital requirements by US$50 billion. The Federal Reserve is considering possible adjustments to the proposal.