Mortgage

JPMorgan Chase net income jumps 10%, beats expectations

Mortgage banking net income drops 21%

JPMorgan Chase recorded a fourth quarter 2015 net income of $5.4 billion, or $1.32 per share, up 10% from $4.9 billon, or $1.19 per share, in the fourth quarter of 2014.

Net revenue marginally increased to $23.7 billion, up 1%, driven by higher revenue in Corporate and Consumer & Community Banking, largely offset by lower revenue in Corporate & Investment Banking and Asset Management.

This beat the capital consensus of $1.30 by $0.02, along with the $22.34 billion revenue capital consensus.

The provision for credit losses jumped to $1.3 billion, up 49%, due to reserve increases in the current quarter versus reserve releases in the prior year quarter. This was partially offset by lower net charge-offs.

Mortgage banking net income fell 21% to $266 million, while net revenue declined 10% to $1.7 billion.  

Additionally, net interest income was up 11% to $1.1 billion, driven by higher loan balances, while non-interest revenue was down 37% to $533 million, due to lower repurchase benefit and lower net servicing revenue.

Net revenue increased 8% quarter-over-quarter, thanks to higher MSR risk management and loan growth, the company said. But this was partially offset by lower repurchase benefit.

Non-interest expense was $1.2 billion, a decrease of 10%, reflecting continuing mortgage efficiencies.

The provision for credit losses grew to $59 million, compared to $13 million in the prior year quarter, due to the absence of a reduction in the allowance for loan losses. However this was largely offset by lower net charge-offs.

"We had a good quarter as 2015 came to a close. The businesses generated strong loan growth and credit quality, except for some stress in energy. The consumer business continues to gather deposits, outpacing the industry. Markets were somewhat quieter, and we saw the impact reflected in the results of our trading and Asset Management businesses,” said Jamie Dimon, chairman and CEO.

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