JPMorgan Chase profits rise 9% in the fourth quarter excluding hit from the Apple Card acquisition

JPMorgan Chase reported a 9% increase in fourth-quarter profits on an adjusted basis, with earnings reaching $13.03 billion, or $4.63 per share. The banking giant’s strong performance reflects robust activity in both consumer and investment banking segments, underscoring the resilience of the U.S. economy.

The results included a one-time charge of 60 cents per share related to JPMorgan’s recent acquisition of the Apple Card credit card portfolio from Goldman Sachs. This acquisition required the bank to set aside $2.2 billion in loan-loss reserves to cover potential risks associated with the new credit card business.

Excluding these reserves, JPMorgan earned $5.23 per share, surpassing analyst expectations of $4.85 per share according to FactSet. However, some analysts had not updated their forecasts following the bank’s purchase of the Apple Card portfolio last week, which may have affected the comparison.

Revenue for the quarter increased by 7% year-over-year, reaching $45.8 billion. Despite the strong results, shares of the New York-based banking giant dipped approximately 3% in morning trading to $314.74.

JPMorgan Chase CEO Jamie Dimon expressed optimism about the U.S. economy in a statement accompanying the earnings release. “While labor markets have softened, conditions do not appear to be worsening,” Dimon noted. “Meanwhile, consumers continue to spend, and businesses generally remain healthy.” He suggested these favorable conditions could persist, citing ongoing fiscal stimulus, deregulation benefits, and the Federal Reserve’s recent monetary policy adjustments.

JPMorgan Chase, along with The Bank of New York Mellon Corp., has kicked off the banking sector’s earnings season. While investors typically focus closely on Wall Street’s health during these reports, recent political developments in Washington may divide their attention this quarter.

President Donald Trump announced on Friday his intention to cap credit card interest rates at 10%, stating his support for congressional bills aiming to implement such a ceiling. If enacted, this cap would significantly impact the profitability of credit card operations across the banking industry, including JPMorgan’s newly acquired Apple Card portfolio.

Adding to the political backdrop, Federal Reserve Chair Jerome Powell revealed on Sunday that the Department of Justice has served the central bank with subpoenas and threatened criminal indictment over his testimony earlier this summer regarding the Fed’s building renovations. This development represents an unprecedented escalation in the tension between the Trump administration and the Federal Reserve, an independent agency that the president has repeatedly criticized for not implementing interest rate cuts as aggressively as he would prefer.

The banking sector faces multiple challenges as it navigates the current economic landscape, including potential regulatory changes, political pressures, and evolving consumer behaviors. JPMorgan Chase’s performance indicates that major financial institutions remain profitable despite these challenges, though investors are clearly monitoring both economic indicators and political developments that could affect future earnings.

As the largest U.S. bank by assets, JPMorgan Chase’s results often serve as a bellwether for the broader financial sector, suggesting that other major banks may also report solid performance for the quarter while preparing for potential regulatory changes on the horizon.

The Apple Card acquisition represents a significant strategic move for JPMorgan Chase, expanding its already substantial credit card business while reducing Goldman Sachs’ presence in the consumer banking space. The transaction highlights the ongoing consolidation and strategic repositioning within the banking industry as financial institutions adapt to changing market conditions and consumer preferences.