JPMorgan Chase's fourth-quarter profit fell 23 per cent, in line with Wall Street expectations, as the European debt crisis depressed trading and corporate deal-making, dragging down shares of the major US banks.

However, chief executive Jamie Dimon said the largest US bank by assets was seeing signs of improvement in US loan demand and credit quality as the economy recovers.

"I believe you are seeing real loan growth," Mr Dimon said in a conference call with reporters.

JPMorgan is the first major US bank to announce results for the fourth quarter. Its figures show Wall Street firms such as Goldman Sachs and Morgan Stanley are in for a tough quarter as investment banking suffers.

JP Morgan's stock fell 4 per cent after the results were published.

Mr Dimon expressed renewed concern about the European debt crisis, saying he was "very, very cautious."

He added: "I would put myself in the 'increasing worried' category."

JPMorgan said fourth-quarter net income was $3.72 billion, or 90 cents a share, down from $4.83 billion, or $1.12 a share, a year earlier. Wall Street analysts, on average, had expected 90 cents a share, according to surveys by Thomson Reuters I/B/E/S.

Revenue declined 17 per cent to $22.2 billion on an adjusted basis. Investment banking revenue fell 30 per cent to $4.36 billion, hurt by a 39 per cent drop in underwriting and advisory fees, a 13 per cent decline in fixed income, and a 31 per cent fall in equity markets.

The results were complicated by an accounting adjustment that reduced earnings by 9 cents per share to reflect a change in the market value of JPMorgan debt during the quarter. In the third quarter, the accounting adjustment added 29 cents per share to profits.

Reuters