JPMorgan profit beats estimates on trading boom, takes hit on Apple card

Jamie Dimon, CEO and chairman of JPMorgan Chase, pauses to talk to reporters after lunch with Republican senators to discuss the economy, at the Capitol in Washington. (AP Photo/J. Scott Applewhite)

JPMorgan Chase’s profit exceeded analysts’ estimates in the fourth quarter on Tuesday as its traders cashed in on volatile markets.

Markets swung sharply in the last three months of 2025 as concerns about a bubble in AI stocks intensified after two years of broad gains. CEO warnings that equities were due for a correction also encouraged investors to rebalance their portfolios.

“The U.S. economy has remained resilient,” CEO Jamie Dimon said in a statement. “While labor markets have softened, conditions do not appear to be worsening. Meanwhile, consumers continue to spend, and businesses generally remain healthy.”

Markets revenue at JPMorgan climbed 17 per cent in the fourth quarter, with fixed income up seven per cent and equity surging 40 per cent.

The bank’s shares were last up about one per cent in choppy premarket trading.

Bond markets also remained jittery as uncertainty persisted around when and how much the U.S. Federal Reserve would cut rates.

The largest U.S. bank earned US$5.23 per share in the quarter ended December 31, on an adjusted basis, beating Wall Street expectations of $5 per share, according to estimates compiled by LSEG.

Spotlight on dealmaking

JPMorgan’s investment banking fees fell five per cent in the quarter, easing from a bumper prior year when a surge in deal activity helped lift the bank to its highest-ever annual profit.

Bankers are optimistic that a pickup in dealmaking will continue through 2026, driven by record-high equity markets and expectations of interest rate cuts.

The U.S. IPO market reached its highest level in 2025 since the 2021 peak, in terms of both deal volume and funds raised.

JPMorgan worked on several high-profile transactions during the quarter, including advising Warner Bros Discovery on the $82.7 billion deal for its studio and streaming assets with Netflix and Kimberly-Clark on its $48.7 billion acquisition of Kenvue.

It was also a lead underwriter on medical supplies giant Medline’s IPO, the largest listing globally in 2025.

JPMorgan extended its run as the world’s top investment bank, earning the highest fees for the year, according to data from Dealogic.

Interest income in focus

Net interest income - the difference between what a bank earns as payments on loans and gives out on deposits - rose seven per cent in the fourth quarter to $25.1 billion. Average loans climbed nine per cent

While lower rates can dent interest income, they can also encourage borrowing. The bank expects 2026 interest income, excluding markets, of about $95 billion.

Large lenders, including JPMorgan Chase and Bank of America, provide a gauge of the U.S. economy, shedding light on consumer spending, borrowing and business activity.

Rivals are set to report results later this week, giving investors a broader view into the health of the economy.

Credit card expansion

Earlier this month, JPMorgan and Apple struck a deal under which the bank became the new issuer of the iPhone maker’s card.

The deal would strengthen JPMorgan’s foothold in credit cards and add to a long list of strategic wins for Dimon, who has turned the bank into a leading player across retail and investment banking.

The bank had said it expects to record a $2.2 billion provision for credit losses in the fourth quarter tied to the portfolio.

The deal comes at a critical juncture for the credit card industry, which could face a sharp shift if a proposal by U.S. President Donald Trump to cap interest rates at 10% moves forward. While Trump has said he expects companies to comply by January 20, Wall Street analysts remain doubtful the measure can be implemented without congressional approval.

A banking industry body warned last week that the move could tighten access to credit for consumers and small businesses and drive borrowers toward unregulated lenders.

(Reporting by Manya Saini in Bengaluru and Saeed Azhar in New York, editing by Lananh Nguyen and Sriraj Kalluvila)