Earn­ings at two big banks surged in 2016

Houston Chronicle - - MARKET SUMMARY - By Renae Merle WASHINGTON POST

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.

Elise Amen­dola / As­so­ci­ated Press file

“The op­ti­mism for pos­i­tive change here at Bank of Amer­ica and among our cus­tomers is pal­pa­ble,” Bank of Amer­ica CEO Brian Moyni­han said Fri­day.

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