US banking giant JPMorgan Chase yesterday reported a 7.3% drop in fourth-quarter earnings as executives said legal and regulatory costs could continue to weigh on results.
The largest US bank by asset said earnings were $5.3bn in the fourth quarter, down from $5.7bn a year ago.
Revenues of $24.1bn were down 1.2% from the year-ago period.
Still, the results were a major improvement from the third quarter, when the bank suffered a rare loss due to a $9.15bn charge to deal with legal regulatory problems.
The results translated into earnings of $1.30 cents per share. Excluding charges and other items, adjusted earnings came in at $1.40 per share, beating analyst expectations by five cents.
Net earnings for full-year 2013 were $17.9bn, down nearly 16% from $21.3bn in 2012.
JPMorgan has spent about $20bn on settlements with US regulators since the beginning of 2013.
These have included $13bn to settle charges that it misled investors on billions of dollars of mortgage-backed securities and about $1bn to resolve charges of poor oversight related to the huge “London whale” trading loss.

Wells Fargo
Wells Fargo & Co reported a better-than-expected 11% jump in fourth-quarter profit, though mortgage financing was at its slowest in five years, and the bank’s shares fell in morning trading.
  The fourth-largest US bank by assets said cost cuts, and dipping into money it had set aside to cover bad loans, helped it post a record profit even though revenue fell 6%, as fewer consumers refinanced home loans due to higher mortgage rates.  
  Indeed, residential mortgage lending volume was at its lowest since the fourth quarter of 2008, during the financial crisis.
Wells Fargo made $50bn of residential mortgage loans in the quarter, less than half the $125bn of the same period a year earlier, and down from $80bn in the third quarter.
  Chief Financial Officer Tim Sloan said on a conference call that the bank expects mortgage volume to continue to fall in the first quarter of 2014, though not as much as in the third and final quarters of 2013.
  Across the industry, applications for mortgage refinancing dropped by nearly a third between the end of September and the end of December, according to the Mortgage Bankers Association.
  At the end of December, Wells Fargo had $25bn of mortgage applications that it had not yet processed, down from $35bn at the end of the third quarter.

IG Group
Signs of economic recovery have renewed confidence among retail investors who have begun trading more, British financial spread betting firm IG Group said yesterday as it reported an 8% rise in first half profit.
  IG Chief Executive Tim Howkins said market conditions in the six months to November 30 were much like the same period in 2012, but this time around clients were much more active.
  “That reflects the fact that consumer sentiment is picking up. The world is slowly emerging from recession, people are feeling a bit wealthier, a bit happier and therefore, more likely to trade,” Howkins told Reuters.
  “(Confidence) is coming back slowly and steadily. It’s certainly in a better place than it was 18 months ago.”
  IG, which allows investors to speculate on the future price of securities or baskets of securities, said first-half revenue was 182.7mn pounds ($299.3mn), compared with 169mn pounds the prior year.
  Shares in the company were up 1.4% at 635 pence at 1000 GMT, compared with a 0.7% drop in the FTSE 250 midcap index.
  IG said its efforts to focus attention on more active clients who produce a greater share of revenue, such as raising minimum deposits and creating a more personalised service for its most valuable users, had also started to bear fruit.