Earnings at two big banks surged in 2016
NEW YORK — Profits at JPMorgan Chase and Bank of America jumped last year, the banks said Friday, as the industry received a boost from a stock market rally that accelerated after the presidential election.
And banks led U.S. stock indexes mostly higher Friday, propelling the Nasdaq composite index to its fourth record high this week.
The banking industry is entering what analysts say could be a period of renewed growth as rising interest rates make it easier for banks to earn a profit and President-elect Donald Trump has said he would roll back regulations put in place after the 2008 financial crisis that have hampered industry profits.
JPMorgan and Bank of America, two of the largest banks in the world, both beat analysts’ profit expectations and gave positive forecasts.
Bank of America reported its largest yearly profit, nearly $18 billion, since the financial crisis. During the fourth quarter, net income jumped 43 percent to $4.7 billion.
JPMorgan CEO Jamie Dimon said he is “comforted” that Trump has picked “professionals” for his administration.
“Give him some time,” said Dimon, who is serving on Trump’s Strategic and Policy Forum.
JPMorgan’s profit leaped 24 percent during the fourth quarter to $6.73 billion. For the entire year, its profit was up 1 percent to $24.7 billion.
Meanwhile, Wells Fargo lagged its competitors as it continues to recover from a sales scandal that sparked several federal investigations. Last September, the bank admitted that thousands of employees had set up sham accounts to meet sales quotas.
It reported a 4 percent profit decline last year, to $21.9 billion. During the fourth quarter, net income slipped to $5.3 billion from $5.6 billion during the same period in 2015.
“The optimism for positive change here at Bank of America and among our customers is palpable,” Bank of America CEO Brian Moynihan said Friday.