JPMorgan profit falls on one-time Apple card deal charge

[NEW YORK] JPMorgan Chase’s profit fell in the fourth quarter as it took a one-time charge tied to its agreement with Goldman Sachs to take over a credit card partnership with Apple.

Profit fell to US$13 billion, or US$4.63 per share, in the three months ended December 31, JPMorgan reported on Tuesday (Jan 13). That compares with US$14 billion, or US$4.81 per share, a year earlier.

Earlier this month, JPMorgan and Apple struck a deal under which the bank became the new issuer of the iPhone maker’s card.

The deal would strengthen JPMorgan’s foothold in credit cards and add to a long list of strategic wins for CEO Jamie Dimon, who has turned the bank into a leading player across retail and investment banking.

The bank had said it expects to record a US$2.2 billion provision for credit losses in the fourth quarter tied to the portfolio.

The deal comes at a critical juncture for the credit card industry, which could face a sharp shift if a proposal by US President Donald Trump to cap interest rates at 10 per cent moves forward. While Trump has said he expects companies to comply by January 20, Wall Street analysts remain doubtful the measure can be implemented without congressional approval.

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A banking industry body warned last week that the move could tighten access to credit for consumers and small businesses and drive borrowers toward unregulated lenders.

Excluding the one-time charge, JPMorgan’s quarterly profit increased to US$14.7 billion, or US$5.23 per share, fuelled by trading. REUTERS