JPMorgan Chase reported a drop in fourth-quarter profits Friday due to a US assessment to replenish emergency funds tapped during last year’s regional bank crisis.
The big US lender’s profits were $9.3 billion, down 15 percent from the year-ago period, following a one-time cost of $2.9 billion for a Federal Deposit Insurance Corporation (FDIC) special assessment after the failures of Silicon Valley Bank and Signature Bank.
Revenues were $38.6 billion, up 12 percent.
Operating profits were boosted by higher net interest income following several Federal Reserve interest rate increases that enabled JPMorgan to charge more for loans.
The bank said it experienced an increase in charge offs related to unpaid credit card balances from customers.
JPMorgan and others have seen unusually few delinquencies in consumer accounts owing to the strong job market. The bank described the recent uptick as part of a “continued normalization.”
Chief Executive Jamie Dimon offered a somewhat more upbeat economic assessment compared with other recent statements, but said there were reasons to “remain cautious.”
“The US economy continues to be resilient, with consumers still spending, and markets currently expect a soft landing,” Dimon said, adding that elevated military spending, energy investment and other factors could cause inflation to be “stickier” and interest rates higher than markets expect.
“While we hope for the best, the past year demonstrated why we must be prepared for any environment,” Dimon said.
Shares rose 1.8 percent in pre-market trading.