Your Evening Briefing: JPMorgan Just Had a Year Like No Other

For much of the American banking industry, 2023 was decidedly unkind. The first half was marked by the sudden implosion of a handful of regional banks while dozens of their brethren swooned. The culprit of course was the war on inflation—rising interest rates had slashed the value of assets and saddled US banks with $684 billion of unrealized losses. Many have spent heavily to keep depositors from leaving and some raised the possibility of defaults on commercial real estate loans. Bond-rating firms meanwhile have downgraded banks in batches. But where there are losers, there almost always are winners. And as a tumultuous year comes to a close, there is one big winner above all, and its name is JPMorgan.

As the spring bloodbath among regional banks began, nervous depositors with more than $50 billion began showing up at JPMorgan’s door. Bank executives went on to raise expectations for net interest income four times throughout the year, eventually pulling in so much cash that managers have taken to warning of “over-earning.” That’s put JPMorgan on track for the biggest annual profit in the history of American banking. Analysts predict that by the end of this month, its annual net income will be 36% higher than last year. By comparison, the combined earnings of the next five largest banks looks to be about 1%. For JPMorgan and its chief executive, Jamie Dimon, it was a year like no other. But not everyone is happy about that.