JPMorgan Chase & Co. (JPM) kicked off the finance sector's fourth-quarter 2010 earnings season on Friday with a stellar report showing the bank's quarterly profits at $4.8 billion, up 47% over the prior year.
Earnings per share came in at $1.12 compared with $0.74 for fourth-quarter 2009, according to the bank's news release. The performance easily beat analysts' expectations for EPS of $0.99, and JPMorgan management said the bank hopes to increase its dividend due to strong capital generation.
For the full year, JPMorgan reaped profits of $17.4 billion, up 48% over 2009, on revenues of $104.8 billion, putting EPS at $3.96 versus $2.26 in 2009.
JPM stock after the earnings release was up $1.18 per share in early trading, or 2.63% higher at $45.63 versus Thursday's close at $44.45.
The bank credited a better consumer lending environment for its earnings success along with solid investment bank results, record commercial banking revenue and more than 1.5 million new checking accounts opened in 2010. However, the bank's retail banking income fell 21% from 2009 as JPMorgan's loan balances shrink.
The Asset Management unit contributed significantly to the results, with record long-term net inflows of $69 billion of assets under management in 2010; net outflows for the year totaled $20 billion. Profits for the unit, which includes the company's private banking, private wealth management and JPMorgan Securities operations, increased 20%, or $83 million, from the fourth quarter of 2009, with net income totaling $507 million. The results in Asset Management
reflected higher net revenue of a record $2.6 billion, an increase of $418 million, or 19%, from the prior year.
Assets under supervision were $1.8 trillion, up 8%, or $139 billion, from the fourth quarter of 2009. Revenue from Private Banking was $1.4 billion, up 18%.
"Solid performance in the quarter and for the year reflected good results across most of our businesses, which benefited from strong client relationships and continued investments for growth," said Chairman and CEO Jamie Dimon in a statement.
