Business

JP Morgan profits beat forecasts

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US banking giant JP Morgan Chase has reported better-than-expected fourth quarter profits thanks to lower legal expenses and better cost control.

Net income rose to $5.43bn (£3.76bn) in the three months to the end of December against $4.93bn a year earlier.

The bank cut costs by 7.4% to $14.26bn in the quarter. Legal expenses fell by almost 50% to $644m from $1.1bn.

Salaries fell 2.4% to $6.69bn as the bank shed around 7,000 staff to 234,598, from 241,359 a year earlier.

US banks have faced a tough year as a result of falling oil prices and worries about slowing growth in China. Those concerns have led to weakness in credit markets, discouraging investors from making big bets.

Legal charges and the costs of meeting stricter capital requirements have also added to the costs of banks.

Total net revenue rose about 1% to $23.75bn, beating analysts' forecasts.

"We had a good quarter as 2015 came to a close," chief executive Jamie Dimon said in a statement.

"The businesses generated strong loan growth and credit quality, except for some stress in energy. The consumer business continues to gather deposits, outpacing the industry," he added.

"Markets were somewhat quieter, and we saw the impact reflected in the results of our trading and asset management businesses."

Profit from investment banking rose 80% to $1.75bn but revenue was 4% lower, the bank added. JP Morgan's consumer banking business reported a 10% rise in profit to $2.41bn.

The bank added provisions for bad loans rose 49% in the quarter to $1.25bn.

JP Morgan is the first of the big US banks to report fourth quarter earnings. Citigroup and Wells Fargo, the third and fourth biggest US banks, are due to report on Friday.

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