The US investment bank reported a record net income of US$8.5 billion for the fourth quarter of 2019, up 21% from the same quarter last year. Net income for full-year 2019, at US$36.4 billion, was also a record for the bank.
In corporate and investment banking revenues reached record levels: markets & services revenue was US$6.1 billion, up 55%; markets revenue was US$5 billion, up 56%; and fixed income markets revenue was US$3.4 billion, up 86%, benefiting from a favourable comparison against a weak prior year.
The overall performance reflected strength across businesses, according to the bank, ‘notably in securitized products and rates, driven by strong client activity and monetizing flows’. Equity markets revenue was US$1.5 billion, up 15%, driven by higher revenue in prime and cash equities; securities services revenue was US$1.1 billion, up three percent, driven by organic growth partially offset by deposit margin compression while credit adjustments & other was a gain of US$126m reflecting lower funding spreads on derivatives, compared with a loss of US$243 million in the prior year.
JP Morgan issued structured products in seven different jurisdictions during the fourth quarter of 2019, according to SRP data.
The vast majority of sales were collected in the US where the bank was the number one provider in the quarter – with a 14% share of the market. JP Morgan accumulated sales of US$2.63 billion from 1,100 products in its domestic market, up (both in volumes and issuance) compared to US$2.47 billion from 907 products in the prior year quarter.
Products linked to an index basket were the preferred option for the US investor, racking up US$1.2 billion (477 products) during Q4 while structures tied to a single index came second, with combined sales of US$860m (377 products). The latter included the bank’s best-selling products in the quarter, which came in the shape of Callable Contingent Interest 48128LNG0, a 10-year certificate of deposit linked to the Eurostoxx Banks index. The structure was distributed via FISN, a subsidiary of Landolt Securities, and sold US$36m during the subscription period.
JP Morgan was also active in the Dach region, were it issued more than 53,000 products – predominately leverage certificates – listed on the exchanges of Frankfurt and Stuttgart. Of these, almost half were linked to the Dax (24,947 products), while the shares of Volkswagen (1,307), Alphabet (966), and BMW (822) were also in demand.
In Hong Kong SAR, the bank sold 493 warrants and 279 securities while there were also products in Switzerland (five), Brazil and Denmark (one each).
‘The corporate & investment bank generated record fourth quarter revenue - including for the markets business, which rebounded from a challenging prior year,’ said Jamie Dimon (pictured), chairman and CEO, commenting on the results.
Click the link to read the full fourth quarter results, earnings presentation and supplement.