NEW YORK —JPMorgan Chase & Co. reported a 7 percent decline in fourth-quarter earnings Wednesday, hit by legal costs and lower trading revenue.
Wells Fargo & Co. also reported its quarterly results. Its net income rose slightly and beat Wall Street expectations.
JPMorgan, the biggest bank in the U.S. by assets, has been hit by legal costs in the past year as it settles lawsuits or other issues with state and federal regulators over its role in the housing bubble and subsequent financial crisis. In the latest quarter, it took a charge of $990 million for legal expenses, more than analysts expected.
JPMorgan earned $4.93 billion, or $1.19 a share, for the three-month period ending in December, compared with $5.28 billion, or $1.30 a share, a year earlier. Analysts were looking for JPMorgan to earn $1.31 a share.
Total revenue at the bank fell 3 percent to $22.5 billion.
JPMorgan’s investment banking division was hit by the sale of its commodities trading division and a slowdown in bond trading, one of the bank’s bigger businesses. Fixed-income revenue fell 23 percent from the prior year to $2.5 billion.
“Those trading numbers came down harder than what analysts thought they would, so that’s largely why investors had an issue with their results,” said Fred Cannon, director of research for Keefe, Bruyette & Woods.
Despite JPMorgan’s legal troubles, 2014 was a very profitable year. The company earned $21.8 billion, an increase of 21 percent. The gain came despite revenues remaining essentially flat.
Wells Fargo
earned $5.38 billion in the fourth quarter, up from $5.37 billion a year earlier. That was after taking out dividends for preferred stock. On a per-share basis, adjusted earnings worked out to $1.02, matching Wall Street’s expectations. Revenue rose 4 percent to $21.44 billion in the three months ending in December, which narrowly topped forecasts.
