JP Morgan reports lighter fourth quarter profits

Published:  16 Jan at 4 PM

On Friday, JP Morgan announced that it accumulated lower fourth-quarter profits in 2011, which were triggered by complications from the eurozone debt crisis and weaker trading throughout its investment banking division, as reported by BBC News.

The Wall Street bank generated a net profit of around $3.7bn in 2011's last three months, down 23 per cent on the $4.8bn made during the same period in 2010. For 2011 as a whole though, profit rose nine per cent to a record of $18.98bn that is all the more impressive when compared with the $17.37bn of 2010.

These results came in line with the expectations of analysts worldwide. While that might be so, revenues for 2011's fourth quarter ended up below forecasts, dropping 18 per cent on a year ago down to slightly over $21.47bn.

The chairman of New York-based investment giants Holland & Co, Mike Holland, commented that the earnings displayed just how well JP Morgan has been managed during one of the roughest periods in recent history. Although lagging in revenues, Holland added, the company was able to get through it while investment banking and trade remained, as he put it himself, “lousy”.

Shares in JP Morgan dropped sharply at the start of trade on Friday after announcement of the results, but did recover to finish the day down two and a half per cent. Net revenue at the firm's investment bank dropped 30 per cent in 2010's fourth quarter, while net profits more than halved and primarily reflected lower market volumes.