JPMorgan Profits Drop in Q4; Wells Fargo Sees Modest Improvement

The San Francisco-based bank said expenses grew nearly 5% year over year in Q4’14 to $12.6 billion, affecting net income. Still, profits rose nearly 2% to $5.71 billion, or $1.02 a share, in the period, topping estimates.

Fourth-quarter revenue increased to $21.4 billion, though mortgage-banking revenue of $1.52 billion fell $118 million from the prior period; the bank reported $44 billion in home loans vs. $48 billion in the third quarter. The bank pointed to loan and deposit growth, as well as a continued strength in credit quality, for the overall sales improvement.

The bank’s Wealth, Brokerage and Retirement unit had net income of $514 million, down $36 million, or 7%, from third quarter of 2014, but up about 5% from $491 million in the year-ago period.

Revenue for the unit was $3.6 billion, though, up $94 million from the prior quarter and $209 million for Q4’13. The unit experienced “strong growth in asset-based fees and higher net interest income [which] were partially offset by lower gains on deferred compensation plan investments (offset in compensation expense) and lower brokerage transaction revenue,” the bank explained in a statement.

As for the retail brokerage, client assets ended the year at $1.4 trillion, up 4% from the prior year. Managed account assets totaled $423 billion, a year-over-year jump of 13%, “reflecting net flows and increased market valuations,” explains the company.

Also, the unit had solid loan growth, with average balances up 21% “largely due to growth in nonconforming mortgages and security-based lending.”

Wealth-management client assets stood at $225 billion as of Dec. 31, up 5% from the prior year. These operations also had loan growth improvement, with average balances up 10% year over year.

— Check out ThinkAdvisor’s 2014 Q4 Earnings Calendar for the Finance Sector.