Fourth-quarter earnings at JPMorgan Chase & Co. soared 68 percent on strong investment banking growth and a gain from the sale of the bank's corporate trust business.
But credit quality weakened somewhat, as it has at other major banks, suggesting that both commercial and individual customers are having more trouble keeping up with their bills.
The New York-based bank, the nation's third largest, said Wednesday that net income was $4.53 billion, or $1.26 a share, in the October-December period, up from $2.7 billion, or 76 cents a share, a year earlier.
Excluding the $622 million after-tax gain on the sale of its trust business, net income was $3.9 billion, or $1.09 a share.
That was well ahead of the 95 cents projected by analysts surveyed by Thomson Financial.
Revenue was $16.05 billion, slightly above the analysts' expectation, and 19 percent ahead of the $13.48 billion reported in the fourth quarter of 2005.
JPMorgan Chase shares were up 61 cents, or 1.2 percent, at $49.00 in premarket trading.
On Tuesday, San Francisco-based Wells Fargo & Co., the nation's fifth largest bank, reported a 13 percent increase in fourth-quarter earnings, while U.S. Bancorp eked out an improvement.
But credit losses increased at both banks, and some analysts believe the weakening housing market and slowing economy are affecting credit quality and worry it could worsen in coming months.
JPMorgan Chase's Chief Executive Officer Jamie Dimon, who also assumed the role of chairman at the start of the year, said in a statement accompanying the earnings report that he was pleased with "both record revenue and income from continuing operations."
In the investment banking division, he said, "fees were at a record level and markets results improved significantly from the prior year."
Dimon said the integration process was going well with the bank branches it obtained from the Bank of New York in exchange for its corporate trust operations.
Dimon, CEO since the beginning of 2006, replaced William B. Harrison Jr. as chairman on his retirement Dec. 31.
Dimon has been warning for some time that the stellar credit conditions _ which reflected a growing economy and reform of national bankruptcy laws in the fall of 2005 _ could not continue. In fact, weaker credit quality has begun showing in several divisions.
JPMorgan's strongest fourth-quarter performance came from the investment bank, where net income grew 51 percent to $1 billion in the October-December period from $667 million a year earlier on record revenue. Still, the provision for credit losses in this division rose to $63 million from $7 million in the third quarter.
In retail financial services, revenue increased but net income declined to $718 million in the fourth quarter from $803 million a year earlier. Results reflected a loss on a mortgage loan portfolio, acquisition of the Bank of New York consumer business and absence of an insurance business that was sold in July 2006, the bank said.
Provisions for credit losses rose to $262 million in the quarter from $158 million a year earlier.
In card services, net income more than doubled to $719 million from $302 million a year earlier. The provision for credit losses of $1.28 billion was down from a year earlier but slightly higher than the $1.27 billion of the third quarter.
For the year, JPMorgan Chase reported net income of $14.44 billion, or $4.04 a share, up from $8.48 billion, or $2.38 a share in 2005. Revenue was $61.4 billion, up from $53.7 billion in 2005.