JPMorgan’s Profits Are Strong, and They’ll Likely Get Stronger

JPMorgan’s Profits Are Strong, and They’ll Likely Get Stronger

In the long run, though, the 21 percent corporate tax rate, down from 35 percent under the previous law, will be a huge boon to companies and their shareholders. JPMorgan, for example, said on Friday that its effective tax rate would be about 19 percent — far lower than what it has paid in most past years.

Wells Fargo is already enjoying the fruits of the new law. Despite the repatriation-related loss, it reaped an overall $3.35 billion gain from the new law. That propelled the bank, based in San Francisco, to a $6.2 billion total profit for the fourth quarter.

Without the one-time impacts from the new tax law, JPMorgan’s profits were impressive. The bank raked in more than $24 billion in profits for the full year, consistent with its 2016 results. Analysts said the results were modestly better than they had expected.

JPMorgan’s investment bank was again a laggard, with profits falling by about one-third from a year earlier. That was partly because of the industry’s continued struggle to make money trading bonds, currencies and commodities — a once-powerful business that has shriveled because of new regulations, changing market conditions and greater competition from companies other than banks.

But its consumer-banking business performed better, with profits climbing 11 percent. If the economy remains strong and interest rates rise, that business is likely to accelerate because JPMorgan and other banks will be able to increase the interest rates they charge on loans.

Source link

About The Author

Related posts

Leave a Reply

Your email address will not be published. Required fields are marked *