What a difference a year makes.
Last year at this time, JPMorgan Chase & Co. offset losses generated by struggling retail customers with profits from securities trading. Now it is the ordinary folks who are helping make up for declining profits from classic Wall Street businesses.
JPMorgan, a giant commercial bank as well as a large securities brokerage and investment bank, said Friday that it earned $4.86 billion, or $1.12 a share, in the fourth quarter, up 47% from a year earlier. Its profit for all of 2010 was $17.4 billion, up 48% from 2009.
In a conference call with analysts, the company's chief executive, Jamie Dimon, cited "a continued improvement on credit as well as the improvement in the economic environment."
The results, the first for the latest quarter from a big U.S. bank, were better than expected and helped push an index of 24 bank stocks up 2.3% on Friday. JPMorgan's stock rose 46 cents, or 1%, to $44.91.
The sharpest increase in profit came in the bank's credit card division. Dimon said more people were taking "their Chase cards out of their wallets at the store."
Going into this earnings season there was growing pessimism about the trading and investment banking operations that helped Wall Street firms such as JPMorgan recover from the financial crisis much sooner than other industries did.
JPMorgan's profits from trading and investment banking were indeed down in the fourth quarter but not as much as expected.
Part of the jump in JPMorgan shares may reflect growing anticipation that the company will raise the dividend it pays shareholders. Dimon said the bank hoped to boost its payout soon after the regulators publish new capital rules for banks, which are expected in March.