Updated with additional information and management commentary.NEW YORK ( TheStreet) -- JPMorgan Chase's ( JPM) disappointing capital markets' revenues in the fourth quarter has lowered expectations for its peers including Citigroup ( C), Bank of America ( BAC) and Goldman Sachs ( GS) who are all set to report next week. The nation's largest bank by assets kicked off the fourth-quarter earnings season, reporting a net income of $3.7 billion or 90 cents per share on a managed basis, compared to a year-ago net income of $4.83 billion or $1.13 per share and a third quarter net income of $4.3 billion or $1.02 per share. The 23% drop in profits was led by a significant decline in its investment banking operations. Net income from investment banking operations dropped 56%, to $726 million from $1.6 billion in the previous quarter. In the year-ago-quarter, the division brought in a profit of $1.5 billion. Total revenue from investment banking and trading dipped 30% to $4.35 billion in the fourth quarter from $6.21 billion in the year- ago quarter and was down 32% from the previous quarter. In the third quarter, the division reported a revenue of $6.36 billion, including a $1.9 billion accounting gain(debit-valuation adjustment) from a fall in the market value of the firm's debt. With spreads tightening in the fourth quarter, the bank reversed some of those gains, reporting a debit-valuation pre-tax loss of $567 million. Adjusting for the DVA, revenues were flat on a sequential basis. Investment banking fees were down 39% to $1.11 billion from $1.83 billion in the year-ago quarter, but improved by 8% from the $1 billion reported in the third quarter. Debt underwriting fees and advisory income improved from the third quarter, but equity underwriting fees came in lower by 5%. Trading revenue was predictably disappointing, as volumes continued to decline in the fourth quarter. Fixed income trading revenues, normally the biggest driver of revenues for the investment banking division, came in at $2.491 billion, down 25% from the third quarter and 13% year on year. Adjusting for debt-valuation gains and losses recorded, fixed income trading fell 6% quarter-on-quarter and 9% year-on-year.