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4th-quarter earnings surge at JP Morgan and Goldman Sachs

At Goldman Sachs, whose New York headquarters is shown above, earnings almost tripled in the fourth quarter.

Associated Press

At Goldman Sachs, whose New York headquarters is shown above, earnings almost tripled in the fourth quarter.

NEW YORK — A pair of Wall Street's biggest banks, JPMorgan Chase and Goldman Sachs, kicked off the industry's earnings season Wednesday. Here is summary of the banks' reports:

JPMorgan Chase

Chief executive Jamie Dimon will get his pay cut by half because of a trading loss that cost the bank more than $6 billion last year and drew sanctions from federal regulators.

The bank, the country's biggest by assets, said it would cut Dimon's pay to $11.5 million for 2012, consisting of $1.5 million in salary and restricted stock awards of $10 million. That's less than half last year's pay of $23 million, which made him the highest-paid chief executive of any of the country's megabanks.

The loss, related to complex investments known as credit derivatives, tarnished the bank's reputation as a scrupulous manager of risk and marked a personal setback for Dimon, a longtime critic of efforts to clamp down on regulatory oversight of major U.S. financial institutions.

Despite that sobering news, JPMorgan's fourth-quarter earnings shot up 55 percent over the same period a year ago. The bank made $5.3 billion after paying preferred dividends, compared with $3.4 billion this time a year ago. Revenue rose 10 percent to $24.4 billion, beating Wall Street's forecasts.

Goldman Sachs

The iconic New York investment bank went some way to restoring its reputation as a Wall Street powerhouse after its earnings almost tripled in the fourth quarter, handily beating analysts' estimates, as investment banking revenues surged.

Goldman earned $2.83 billion after paying preferred dividends, compared with $978 million a year earlier. The bank's debt underwriting business profited from a rally in bonds and a surge in demand for debt securities. Goldman's debt underwriting business earned $1.96 billion in revenues for the year, its second-best annual performance and the highest since 2007. An increase in stock underwriting also helped boost revenues.

"The fourth quarter reminds us a little of the old days and should give investors confidence in Goldman's future earnings power," Glenn Schorr, an analyst at Nomura, wrote to clients.

Revenue for the fourth quarter rose to $9.24 billion, 53 percent higher than in the same period a year ago, beating analysts' estimates of $7.97 billion.

Goldman earned $5.60 on a per-share basis, compared with the average analysts forecast of $3.71, according to data provider FactSet.

4th-quarter earnings surge at JP Morgan and Goldman Sachs 01/16/13 [Last modified: Wednesday, January 16, 2013 8:33pm]
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