Leading American banks Goldman Sachs and JP Morgan reported on Wednesday that they sharply increased profits in the fourth quarter of last year, thanks to strong results in their investment banking divisions.
Goldman Sachs thus tripled its net profit in the last quarter of the previous year to $2.9 billion, reported the BBC. Revenues surged by 50 percent to $9.2 billion. Meanwhile, net profit from the investment banking division jumped by 63 percent to $1.4 billion.
For the entire last year, the bank’s net profit amounted to $7.5 billion, compared to $4.4 billion earned in 2011.
In a separate report, JP Morgan stated that it achieved a net profit of $5.7 billion in the last quarter of 2012, which is 54 percent higher than in the same period of the previous year.
They also emphasized that they halved the total salary of CEO Jamie Dimon compared to 2011, to $11.5 million. This amount includes a salary of $1.5 million, which is the same as in 2011, and a stock option bonus worth $10 million, which is 54 percent less than in 2011.
The bank also tightened its risk control mechanisms due to multi-billion dollar losses in trading financial derivatives caused by London trader Bruno Iksil.
American regulators told JP Morgan yesterday that it must reform its risk management system.
JP Morgan increased its revenues by 10 percent in the last quarter of 2012 to $24.4 billion, thanks to strong growth in loans and deposits and reduced reserves for non-performing loans.
The bank set aside $656 million for reserves during the observed period, compared to $2.2 billion it set aside in the last quarter of 2011.
The investment banking division also performed well, like Goldman Sachs, more than doubling its net profit to $2 billion.
For the entire year of 2012, the bank recorded a record net profit of $21.3 billion.
