JPMorgan Chase & Co. closed out the most profitable year in U.S. banking history with its seventh consecutive quarter of record net interest income and a surprise forecast that the windfall may continue this year. 

NII — the difference between what banks earn on loans and pay out on deposits — came in at US$24.2 billion in the final three months of the year, the company said in a statement Friday. The haul for all of 2024 may rise to about $90 billion, according to the bank, while analysts had been expecting a two per cent drop. 

“Our record results in 2023 reflect over-earning on both NII and credit, but we remain confident in our ability to continue to deliver very healthy returns even after they normalize,” Chief Executive Officer Jamie Dimon said in the statement.

JPMorgan and its largest peers — Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. — all reported results Friday, offering a look at how the U.S. economy held up in the last three months of the year. Investors are also keen for details on what executives are expecting for the year ahead as they reckon with the Federal Reserve’s policy pivot from two years of boosting interest rates.

Wells Fargo said Friday that its 2024 NII haul could fall as much as nine per cent. On an earnings call, JPMorgan Chief Financial Officer Jeremy Barnum warned that the bank expects the quarterly figures to decrease throughout the year.

“It’s important to note that we just reported a quarterly NII ex-markets run rate of $94 billion,” Barnum said. The outlook for 2024 “implies meaningful, sequential, quarterly declines” this year, he said.

Shares of JPMorgan, up 26 per cent in the past year, climbed 2.9 per cent to $175.30 at 9:32 a.m. in New York. 

Results from the biggest U.S. bank included a $2.9 billion charge tied to the failures of Silicon Valley Bank and Signature Bank. The Federal Deposit Insurance Corp. levied a special assessment to backstop uninsured depositors at those firms after they collapsed last year. JPMorgan warned that it would take the charge, which it previously estimated at around $3 billion.

The bank spent more than analysts estimated in the fourth quarter as Dimon warned that inflation could last longer than many investors anticipate. Expenses climbed to $24.5 billion, a jump of 29 per cent. Beyond the FDIC special assessment, JPMorgan cited higher compensation for the increase. The bank’s outlook for adjusted expenses this year is about $90 billion, according to a presentation on its website.

Dimon said the need for increased government spending on the green economy, the military and the restructuring of global supply chains “may lead inflation to be stickier and rates to be higher than markets expect.” 

Markets revenue climbed slightly, beating expectations, with the eight per cent gain fixed-income traders notched more than offsetting an eight per cent drop on the equities side. Investment-banking revenue climbed 13 per cent but came in below estimates as a beat in equity underwriting was more than offset by misses in debt underwriting and advisory.

Net charge-offs were $2.2 billion, more than expected, driven by the firm’s credit-card business and “single-name exposures in wholesale which were largely previously reserved.” JPMorgan added $598 million to the pile of money set aside for soured loans, also mostly tied to cards. 

The results also included $743 million in net investment securities losses. 

With assistance from Keith Gerstein.