The big money houses in the USA benefited from many important factors in 2021.
(Photo: Reuters)
new York The US bank leader JP Morgan reports a 14 percent drop in profit for the fourth quarter of 2021. JP Morgan made a profit of $10.4 billion from October to December, up from $12.1 billion a year earlier, the largest US bank announced on Friday. Analysts had expected an even sharper drop in profits.
While the mergers and acquisitions business flourished, the trading business in particular weakened in the final quarter. Earnings per share were $3.33 per share and sales were $30.4 billion.
JP Morgan shares lost up to four percent in premarket trading. The most important US indices are likely to start in the red. The European industry index also turned negative after reaching its highest level in three and a half years in the morning.
In 2021 as a whole, the money house earned 48.3 billion US dollars (42.2 billion euros) – almost two thirds more than in the previous year. This leap in profit is primarily due to the release of provisions. If the bank put 17.5 billion dollars into the risk pot in the first Corona year, it was able to withdraw almost 9.3 billion dollars in the following year.
Top jobs of the day
Find the best jobs now and
be notified by email.
Recently, major American banks have also benefited from increased consumer spending. “The economy continues to perform reasonably well, despite headwinds from the Omicron variant, inflation and supply chain shortages,” said CEO Jamie Dimon. Credit quality remains good and demand for loans has increased.
Profit slump at Citigroup
Also at the Citigroup profit has plummeted: strong growth in investment banking ensured that the bank still earned more in the fourth quarter than analysts had given it credit for. The financial group achieved a profit of 3.2 billion dollars – a decrease of 26 percent within the year.
Citigroup nevertheless increased earnings by one percent to $17.0 billion. There has been significant growth in investment banking, which has benefited from many IPOs, mergers and acquisitions. The money house made a profit of $1.46 per share. Analysts had only expected $1.38. The share was also almost four percent lower.
Citigroup recently faced higher costs related to fixing weaknesses that supervisors had identified in the institution’s control systems. Under the leadership of CEO Jane Fraser, the bank has initiated a restructuring and is separating from private customer divisions outside the USA.
Citigroup announced on Friday that it would sell its retail banking business in Indonesia, Malaysia, Thailand and Vietnam to Singapore-based rival United Overseas Bank for $3.7 billion.
For the full year 2021, despite the weaker final quarter, Citigroup posted a 99 percent increase in profit to almost $22 billion, again primarily due to the release of risk provisions. Overall, revenue fell 5 percent to $71.9 billion
Wells Fargo expands surplus
At the competitor Wells Fargo on the other hand, the profit in the final quarter was 86 percent higher. The fourth largest financial group in the USA achieved a surplus of 5.8 billion dollars after 3.09 billion dollars a year ago.
Earnings per share were $1.38 per share. Analysts had expected $1.13 per share. The stock rose 2.6 percent to a three-and-a-half-year high of $57.40.
Wells Fargo sold its asset management and corporate trust businesses last year. That boosted profits by $943 million in the quarter.
The world’s largest wealth manager, Blackrock, also opened its books on Friday. Assets under management reached a record $10.01 trillion as of December 31st. At the end of the previous year it was still 8.68 trillion. Adjusted earnings increased 2.5 percent to $1.61 billion.
More: “Banking systems are getting smaller everywhere” – Jamie Dimon prepares banks for more competition.