JPMorgan beats 4th-quarter revenue and profit estimates — and CEO Jamie Dimon offers a bullish outlook for the US economy

• JPMorgan reported fourth-quarter earnings Friday that beat Wall Street's forecasts.
• However, the bank posted lower profits in three of its four main divisions.

JPMorgan Chase reported fourth-quarter revenues and earnings on Friday that beat Wall Street's forecasts. However, profits slumped in three of its four main divisions.

JPMorgan shares fell as much as 6% on Friday after CFO Jeremy Barnum said on an earnings call that the bank expected headwinds such as higher expenses to mean it undershoots its targeted return on capital of 17%.

The largest US bank reported $30.35 billion in managed revenue and $3.33 in diluted EPS, exceeding Bloomberg consensus estimates of $30.00 billion and $2.99 respectively. It enjoyed a $1.3 billion net benefit from the release of some of the provisions for bad debts it made during the pandemic.

"JPMorgan Chase reported solid results across our businesses, benefiting from elevated capital markets activity and a pick up in lending activity," CEO Jamie Dimon said in the earnings release.

The bank's asset and wealth management business was the standout performer. The segment grew its net income by 46% to $1.1 billion last quarter, reflecting higher management fees and growth in loans and deposits. Moreover, its assets under management swelled 15% to $3.1 trillion.

In contrast, the consumer and community banking division posted a 2% drop in net income, as growth in consumer and business banking was offset by lower sales in the home-lending and card-and-auto subdivisions.

JPMorgan's corporate and investment banking division also saw a 9% slump in net income to $4.8 billion. A 28% rise in banking revenues was offset by higher compensation, brokerage, and legal expenses, which pushed non-interest expenses up 18%.

Finally, the commercial-banking business suffered a 38% drop in net income to $1.3 billion, reflecting lower credit-reserve releases than in the fourth quarter of 2020.

Dimon, whose comments on the markets and the US economy are closely followed, gave an optimistic outlook.

"The economy continues to do quite well despite headwinds related to the Omicron variant, inflation and supply chain bottlenecks," Dimon wrote. "We remain optimistic on US economic growth as business sentiment is upbeat and consumers are benefiting from job and wage growth."