NEW YORK (AP) — Three of the nation's biggest banks said Friday that their profits fall last quarter, as JPMorgan Chase, Bank of America and Citigroup deal with the lingering effects of higher interest rates and the industry costs of last year's banking crisis that caused the collapse of Silicon Valley Bank and Signature Bank.
But setting aside the turbulence of the banking panic, the banks had a mostly strong 2023 driven by a resilient job market, a U.S. consumer who continues to spend and not fall behind on their debts despite the impact of inflation, and higher interest rates that have boosted revenue across the industry.
JPMorgan Chase said Friday that its profits dropped 15% in the fourth quarter, despite the bank reporting record quarterly revenue. JPMorgan's profits fell because it was required to pay $2.9 billion to the Federal Deposit Insurance Corp. as part of an industry-wide, one-time special assessment by the regulator to cover the government's costs for covering uninsured depositors caught up in the collapse of Silicon Valley Bank.
With that aside, JPMorgan brought in an eyeball-popping $50 billion in profits last year, up from $37.6 billion in profits in 2022. Revenue at the largest bank in the country was nearly $160 billion.
The U.S. economy continues to be resilient, with consumers still spending, and markets currently expect a soft landing," said Jamie Dimon, JPMorgan's CEO and chairman, in a statement. A soft landing refers to the Fed's plan to slow the U.S. economy from inflation without putting the economy into recession.
Bank of America also took a one-time $2.1 billion charge to cover its portion of the FDIC's special assessment. Along with some other charges, BofA's profits fell 50% from a year earlier.
Citigroup had to report a loss as well due to the FDIC's assessment and other charges. The New York-based bank posted a fourth-quarter loss of $1.8 billion.
One bright spot was Wells Fargo. The San Francisco-based Wells earned $3.45 billion, or 86 cents per share, on $20.5 billion in revenue. Profits met Wall Street analysts’ targets while sales came in just ahead of forecasts. Analysts were looking for profit of 86 cents per share on $20.3 billion in revenue.
For the full year, Wells’ revenue increased by 11% over 2022, jumping to $82.6 billion. It was boosted by a 16% increase in net interest income. Earnings per share for 2023 came in at $4.83, up by almost 48% over the previous year’s $3.27.
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AP Business Writer Matthew Ott contributed to this report from Washington.