JPMorgan Chase (JPM.US), the largest US bank by assets, reported an unexpected decline in its fourth-quarter investment banking revenue, falling short of the performance guidance it issued last month. The bank released its Q4 financial results on Tuesday Eastern Time, showing that under Non-GAAP measures, revenue rose 7% year-over-year to $46.77 billion, exceeding market expectations by $520 million; Non-GAAP earnings per share were $5.23, beating market forecasts by $0.37. JPMorgan kicked off this round of bank earnings season on Tuesday, with banking giants including Bank of America, Wells Fargo, Citigroup, Goldman Sachs, and Morgan Stanley scheduled to report their results on Wednesday and Thursday. Driven by policy adjustments under the Trump administration, the industry is projected to record its second-highest annual profit in history.
According to the earnings report released Tuesday, JPMorgan generated $2.35 billion in investment banking revenue for the final three months of 2025, a 5% decrease compared to the same period last year. This contrasts with the bank's projection in December that this revenue stream would achieve "low single-digit percentage growth." The weak investment banking performance was primarily dragged down by an unexpected 2% drop in bond underwriting revenue, whereas analysts had generally anticipated a 19% increase for this segment.
Chief Executive Officer Jamie Dimon stated in the earnings release, "The U.S. economy continues to show resilience. While the labor market has softened somewhat, conditions show no signs of deteriorating. Meanwhile, consumers continue to spend, and businesses are generally healthy overall." Dimon suggested this state of affairs "may persist for some time."
For the full year 2025, JPMorgan achieved a net profit of $57 billion, failing to surpass the record-high annual profit for a US bank set in 2024. In the fourth quarter, the bank's trading revenue reached $8.24 billion, not only exceeding the high end of analyst estimates but also seeing both its equity and fixed income trading divisions outperform market expectations. This capped off several consecutive quarters of strong performance last year, driving the business's full-year total revenue to a historic high.
The investment banking results were mainly hampered by an unforeseen 2% decline in debt underwriting revenue, against a widespread market expectation of 19% growth for this income line. Headquartered in New York, JPMorgan's stock has climbed 33% over the past year and was up a slight 0.4% in pre-market trading at the time of writing.
The bank demonstrated strong net interest income performance. In the first three quarters of last year, large banks expanded their loan books at the fastest pace since the financial crisis, significantly boosting net interest income. JPMorgan's loan balances grew 3% sequentially in the fourth quarter to $1.5 trillion, while net interest income climbed 7% year-over-year to $25.1 billion.
The bank also reiterated its expectation for full-year 2026 expenses to reach approximately $105 billion. Last month at an industry conference, Marianne Lake, head of the Consumer & Community Banking division, had previewed this outlook, which exceeded analyst expectations, citing "expenses related to business scale growth" as a primary driver.
Notably, the bank set aside $2.2 billion for its collaboration project with Apple. JPMorgan announced last week that it would replace Goldman Sachs as the new partner for Apple's credit card business. Although the transition period is expected to take about two years, the bank recognized a $2.2 billion provision for credit losses related to this deal in the fourth quarter. Overall, the bank increased its total provision for potential bad loans by $2.1 billion in the last three months of the year, aligning with general market expectations.
