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Yesterday JP Morgan kicked off the latest earnings season. So how good were their results? Well, they posted the best year for any US bank in history. Boom! Profits were 21% higher, coming in at $36.4 billion. Those sort of numbers are still hard to wrap my head around. Thanks to having a great 2019, the share price has increased by 38% over the past 12 months. Having a volatile market, which we have had thanks to geopolitics, means their trading division prints money. In 2019 trading saw an increase of 56% in revenues.
Where to next? JP Morgan says that there is still room to grow. They are pushing hard to get a bigger business in China and then to stark bulking up their offices in underrepresented geographies. They are also looking at growing their credit card business. Unsecured debt is a higher risk business, but with interest rates set to be lower for longer, it will reduce that risk level. Added to that, JP Morgan says the US consumer still looks to be strong and in a good position.
Overall, this was an excellent year for the bank. For the year ahead, they probably won't see the same growth in profits, but that is not the end of the world. Banks are traditionally valued very conservatively, which means their share prices can handle fluctuations in profits. It also means that they have good dividend yields. In conclusion, don't expect another 40% gain in the share price over the next 12 months. Even without the share price growth, you can enjoy the dividend and hopefully, a stable position in your portfolio.
