JPMorgan profit slips 7% in fourth quarter

NEW YORK -- JPMorgan Chase & Co.’s profit slipped 7% in the fourth quarter as the bank’s legal costs mounted and investment banking slumped.

The nation’s largest bank said Tuesday it earned $5.3 billion, or $1.30 a share, down from $5.7 billion, or $1.39, the same period a year ago.

Analysts had expected JPMorgan to post $1.35 in earnings per share, according to Thomson Reuters.

For all of 2013, JPMorgan earned $17.9 billion in profit, down 16% from $21.3 billion in 2012.
Last year was an expensive one for JPMorgan. The bank paid a record $13 billion in penalties to settle a raft of federal and state investigations into faulty mortgage investments at the heart of the financial crisis.

Just last week, JPMorgan agreed to pay $2.6 billion to settle charges it turned a blind eye to the epic Ponzi scheme orchestrated by Bernard Madoff. The bank booked those costs in the fourth quarter.

“We are pleased to have made progress on our control, regulatory and litigation agendas and to have put some significant issues behind us this quarter,” Jamie Dimon, the bank’s chairman and chief executive said in a statement. “It was in the best interests of our company and shareholders for us to accept responsibility, resolve these issues and move forward.”

The banks said profit from consumer banking rose 19% to $2.4 billion in the fourth quarter, thanks largely to lower provisions for credit losses.

But the New York company’s results were dragged down by its investment banking unit, which saw its net income tumble 57% to $858 million in the fourth quarter.

JPMorgan also saw continued weakness in the mortgage market amid rising interest rates and an industry-wide slowdown in refinancing.

The bank’s mortgage originations fell 54% to $23.3 billion. Still, profit from its mortgage banking unit overall rose 34% to $562 million on lower non-interest expenses and a decline in provisions for loan losses.

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