Last year was a tumultuous one for American farmers and manufacturers as President Donald Trump squabbled with trading partners around the world. American banks, however, had a ball.
JPMorgan Chase, the country’s largest bank, reported record profits on Tuesday, and Citigroup posted its best results since before the 2008 financial crisis.
Chase earned $36.4 billion last year, up from $32.5 billion in 2018. It earned $8.5 billion in the final three months of last year, also a record. Citi could not quite match that performance, but its $19.4 billion profit for 2019 beat the previous year, and its $5 billion result for the year’s final quarter surpassed the profit it earned in the same period in 2018.
One reason for their success: the 2019 turnaround in the financial markets. The end of 2018 seemed to portend a reckoning as investors fretted over the trade war and the Federal Reserve’s plans to drain cash from the financial system. But rate cuts by the Fed last year helped markets creep steadily to new highs.
JPMorgan’s fixed-income trading revenues in the final quarter of 2019, for example, were 86% higher than in the same period a year earlier.
“The quarter was very strong on absolute terms,” JPMorgan’s chief financial officer, Jennifer Piepszak, said on a call to discuss the bank’s results with journalists.
Wells Fargo, which is still digging itself out from a series of scandals that cost it billions of dollars and led to the departures of two successive chief executives, managed net income of $2.9 billion for the quarter. That was well off the $6.1 billion it reported for the same period in 2018.
The bank said it was setting aside $1.5 billion to pay legal costs, but even that did not explain the decline. Executives said it would be a priority for the bank to become more efficient.
The bank’s new leader, Charles W. Scharf, warned that there was still “substantial” work to be done to get things back on track.
Despite its problems, Wells Fargo distributed $9 billion to shareholders through dividends and share buybacks last year.