JPMorgan Chase & Co
Analysts had been hoping that JPMorgan, seen as one of the best-managed U.S. banks, would show signs that its credit costs were leveling off or even starting to fall.
I don't think we can take away from these results that we are any further along in the (economic) recovery than we thought we were, said David Dietze, chief investment officer at Point View Financial Services.
New York-based JPMorgan, the second-largest U.S. bank by assets, posted a quarterly profit of $3.3 billion, or 74 cents a share, compared with $702 million, or 6 cents a share, a year earlier. Analysts on average expected 61 cents a share, according to Thomson Reuters I/B/E/S.
Revenue was $25.2 billion, falling short of analysts' average forecast of $26.8 billion.
Chief Executive Jamie Dimon said in the earnings statement, While we are seeing some stability in delinquencies, consumer credit costs remain high, and weak employment and home prices persist.
The bank's large mortgage and credit card businesses have suffered rising losses in the last year, offset only by record investment banking revenue.
JPMorgan said it increased mortgage loss reserves to $4.2 billion in the fourth quarter, up $653 million from a year earlier. Loan loss reserves in its commercial banking unit increased to $494 million from $190 million.
Prime mortgage net charge-offs -- loans the bank does not expect to be repaid -- soared to $568 million, or 3.81 percent, from $195 million, or 1.2 percent, a year earlier.
JPMorgan is the bellwether, it is the best, most well-capitalized, best-managed bank, said Jamie Cox, managing partner at Harris Financial Group in Colonial Heights, Virginia. You would hope they'd be the first bank to be able to begin the process of paring down loan loss reserves.
JPMorgan is the first of the big U.S. banks to report fourth-quarter results. Its credit losses could indicate further trouble for Citigroup Inc
JPMorgan shares fell almost 2 percent to $43.86 in premarket trading. Shares of other major banks also fell.
(Reporting by Elinor Comlay; editing by John Wallace)