JPM's Q4 Earnings Beat Estimates on Solid Trading & NII, Weak IB Hurts

Impressive trading performance and higher net interest income (NII) drove JPMorgan’s JPM adjusted fourth-quarter 2025 earnings of $5.23 per share. The bottom line handily surpassed the Zacks Consensus Estimate of $5.01.Behind JPMorgan’s Q4 Headline NumbersMarkets revenues were impressive and exceeded management's expectations of growth in the low-teens percentage rate. The metric soared 17% to $8.2 billion. Specifically, fixed-income markets revenues rose 7% to $5.38 billion, while equity markets revenues jumped 40% to $2.86 billion. However, the investment banking (IB) business performance was weaker than expected by management. Advisory fees declined 3%, while debt and equity underwriting fees fell 16% and 2%, respectively. Thus, total IB fees (in the Commercial & Investment Bank or CIB segment) were down 5% from the prior-year quarter to $2.35 billion. The company had projected IB fees to be up in the low single digits during the quarter.The company recorded an increase in net interest income (NII), driven by higher yields and 11% year-over-year jump in total loans. Management expects NII to be almost $103 billion for this year, up 7.4% from $95.9 billion in 2025.Among other positives, Consumer & Community Banking (CCB) average loan balances were up 1% year over year. Also, debit and credit card sales volume increased 7%. On the other hand, mortgage fees and related income fell 5% to $357 million.  During the quarter, operating expenses rose. Management expects adjusted non-interest expense to be $105 billion for this year, up from $96 billion in 2025. Also, provisions increased during the quarter.JPM’s Revenues Rise, Expenses UpNet revenues, as reported, were $45.79 billion, up 7% year over year. The top line outpaced the Zacks Consensus Estimate of $45.69 billion. NII rose 7% year over year to $25 billion. Non-interest income also grew 7% to $20.8 billion. Non-interest expenses (on a managed basis) were $23.98 billion, up 5% year over year. This was mainly due to higher compensation expenses, brokerage expense and distribution fees, marketing costs, occupancy expenses and auto lease depreciation, partly offset by the release of the FDIC special assessment accrual. The performance of JPMorgan’s business segments, in terms of net income generation, was decent. The CIB and Asset & Wealth Management witnessed a rise in net income on a year-over-year basis. On the other hand, the CCB and Corporate segments recorded a fall in net income.Results in the reported quarter excluded $2.2 billion of credit reserve established for the forward purchase commitment of the Apple credit card portfolio. After considering this, net income declined 7% to $13.03 billion.JPMorgan’s Credit Quality WeakProvision for credit losses was $4.66 billion, soaring 77% from the prior-year quarter. This included the above-mentioned provision for the Apple credit card portfolio.Net charge-offs (NCOs) increased 5% to $2.51 billion. Also, as of Dec. 31, 2025, non-performing assets (NPAs) were $10.36 billion, surging 11%.JPM’s Capital Position SolidTier 1 capital ratio (estimated) was 15.5% at the fourth-quarter end, down from 16.8% in the prior-year quarter. Tier 1 common equity capital ratio (estimated) was 14.5%, down from 15.7%. Total capital ratio was 17.3% (estimated) compared with 18.5% a year ago.Book value per share was $126.99 as of Dec. 31, 2025, compared with $116.07 a year ago. Tangible book value per common share was $107.56 at the end of December 2025, up from $97.30.Update on JPMorgan’s Share RepurchasesDuring the reported quarter, JPMorgan repurchased 26.7 million shares for $7.9 billion.Our Take on JPMorganNew branch openings, strategic acquisitions, global expansion efforts and decent loan demand are likely to keep aiding JPMorgan’s revenues. Yet, as the rates decline, the company’s NII expansion pace is expected to slow down, while an improving lending scenario will offer some support. Weak asset quality and mounting expenses are concerns.  JPMorgan Chase & Co. Price, Consensus and EPS Surprise JPMorgan Chase & Co. price-consensus-eps-surprise-chart | JPMorgan Chase & Co. QuoteJPMorgan currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Earnings Dates & Expectations of JPM’s PeersBank of America BAC is slated to report fourth-quarter and full-year 2025 numbers on Jan. 14.Over the past week, the Zacks Consensus Estimate for Bank of America’s quarterly earnings has been revised 1% lower to 95 cents. This indicates a 15.9% rise from the prior-year quarter. Citigroup C is also scheduled to announce fourth-quarter and full-year 2025 results on Jan. 14.Over the past seven days, the Zacks Consensus Estimate for Citigroup’s quarterly earnings has been revised 5.2% lower to $1.65. This implies 23.1% growth from the prior-year quarter.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bank of America Corporation (BAC): Free Stock Analysis Report JPMorgan Chase & Co. (JPM): Free Stock Analysis Report Citigroup Inc. (C): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks