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JPMorgan Falls as Revenue, Profit Shrink, Consumer Banking Struggles

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By Dhirendra Tripathi

Investing.com – JPMorgan (NYSE:JPM) stock slipped 3.2% in Friday’s premarket trading after the Wall Street giant’s fourth-quarter revenue fell short of expectations.

The financial services giant, along with rivals like Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC), has had a record run for more than a year as the pandemic fueled demand for consumer loans and their advisory services in a booming capital market. Part of that business, mostly the consumer banking segment for JPMorgan, had a tough quarter as a supply crunch and elevated prices hit home.

Home lending revenue was down by more than a quarter as revenue from mortgage fees and related income more than halved. The company closed December with fewer home loan accounts on a year-on-year basis.

The card business suffered due to higher acquisition costs while lower operating lease income dealt a hit to the auto business. A tight automobile market, which manufacturers were unable to supply fully with new output, slowed auto loan originations to $8.5 billion, down 23%.

Combined debit and credit card spending was up 26% but average loans in both consumer and commercial banking businesses fell.

The bank’s investment banking continued to shine as its advisory services were sought for public offerings as well as M&A. Investment banking revenue soared 28% to $3.2 billion.

Markets revenue fell 11% after a record 2021 for equities but was up compared to the fourth quarter of 2019. Fixed income markets revenue fell 16%, driven by rising government bond yields as well as lower revenue in credit, currency and emerging markets.

Overall, revenue fell a tad but still topped $29 billion. Net profit fell 14% but stayed above the $10-billion mark.

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