Hugh Son New York
JPMORGAN Chase’s fourth-quarter profit fell 6.6 percent, as the sale of a business units pushed fixed-income revenue lower and legal costs rose, the biggest US bank said yesterday.
Net income declined to $4.93 billion (R57bn), or $1.19 a share, from $5.28bn, or $1.30, a year earlier.
The bank has sold physical commodities units and its Global Special Opportunities Group investment portfolio as part of an effort to simplify its business. Fourth-quarter trading revenue fell about $300m because of that initiative.
Wall Street firms contended with shrinking trading revenue in 2014 as three quarters of muted volume was followed by surging volatility across asset classes in the final three months of the year.
Large price swings in commodities, rates and credit markets probably deterred clients in the fourth quarter, according to David Konrad, an analyst at Macquarie Group.
“The tough part about this group is that it kind of has to be Goldilocks volatility – too little, and you can’t make anything on the trades, and too much, you lose money making a market,” Konrad said. “It’s been frustrating because we’ve gone from one extreme to the other.”
Chief executive Jamie Dimon had to contend once again last year with allegations of misconduct by the bank, this time that currency dealers rigged foreign-exchange benchmarks. JPMorgan agreed in November to pay about $1bn to resolve US and UK investigations into the practice.
The bank settled a related lawsuit this month, agreeing to pay institutional investors about $100 million, and still faces a criminal probe from the Justice Department. – Bloomberg