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JPMorgan Chase Reports Fourth-Quarter 2012 Net Income Of $5.7 Billion, Or $1.39 Per Share, On Revenue1 Of $24.4 Billion

Stocks in this article: JPM

Treasury and CIO reported a net loss of $157 million, compared with net income of $417 million in the prior year. Net revenue was a loss of $110 million, compared with net revenue of $845 million in the prior year. Net revenue included net securities gains of $103 million from sales of available-for-sale investment securities during the current quarter and principal transactions revenue of $99 million. Net interest income was a loss of $388 million due to low interest rates and limited reinvestment opportunities.

Other Corporate reported net income of $605 million, compared with a net loss of $95 million in the prior year. The current quarter included an after-tax benefit of $620 million for tax adjustments, which was partially offset by a pretax expense of $184 million for additional litigation reserves. The prior year included pretax expense of $527 million for additional litigation reserves.

JPMORGAN CHASE (JPM) (*)

 
Results for JPM($ millions)         3Q12   4Q11
  4Q12   3Q12   4Q11   $ O/(U)   O/(U) %   $ O/(U)   O/(U) %
Net Revenue   $24,378   $25,863   $22,198   ($1,485)   (6)%   $2,180   10%
Provision for Credit Losses   656   1,789   2,184   (1,133)   (63)   (1,528)   (70)
Noninterest Expense   16,047   15,371   14,540   676   4   1,507   10
Net Income   $5,692   $5,708   $3,728   ($16)   -   $1,964   53%

(*) Presented on a managed basis. See notes on page 14 for further explanation of managed basis. Net revenue on a U.S. GAAP basis totaled $23,653 million, $25,146 million, and $21,471 million for the fourth quarter of 2012, third quarter of 2012, and fourth quarter of 2011, respectively.

Discussion of Results:

Net income was $5.7 billion, up $2.0 billion, or 53%, from the prior year. The increase in earnings was driven by higher net revenue and lower provision for credit losses, partially offset by higher noninterest expense.

Net revenue was $24.4 billion, up $2.2 billion, or 10%, compared with the prior year. Noninterest revenue was $13.1 billion, up $3.2 billion, or 32%, from the prior year, due to higher mortgage fees and related income, higher investment banking fees and higher principal transactions revenue. The current-quarter revenue includes a $567 million loss from DVA on certain structured and derivative liabilities resulting from the tightening of the Firm’s credit spreads. Net interest income was $11.3 billion, down $989 million, or 8%, compared with the prior year, reflecting the impact of low interest rates, as well as runoff of higher-yielding loans, faster mortgage-backed securities repayments and limited reinvestment opportunities, partially offset by lower deposit costs.

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