Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Nyse  >  JP Morgan Chase & Company    JPM

JP MORGAN CHASE & COMPANY

(JPM)
  Report  
Delayed Quote. Delayed Nyse - 08/16 04:00:05 pm
107.72 USD   +2.40%
08/16LIVESTOCK HIGHLIGHTS : Top Stories of the Day
DJ
08/16Investors Flock to Gold ETFs
DJ
08/16MARKETS RIGHT NOW : Stocks end turbulent week broadly higher
AQ
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsOfficial PublicationsSector newsMarketScreener StrategiesAnalyst Recommendations

Morgan Stanley Profit Falls as Trading Slows -- WSJ

share with twitter share with LinkedIn share with facebook
share via e-mail
0
07/19/2019 | 02:48am EDT

By Liz Hoffman and Peter Rudegeair

Quarterly profit fell 10% at Morgan Stanley, the last of the big U.S. banks to report earnings in a mixed quarter where trading slowed and Main Street banks carried the day.

The bank reported a profit of $2.2 billion, or $1.23 a share, on $10.2 billion in revenue, both down from a year ago. Analysts polled by FactSet had expected a profit of $1.9 billion, or $1.13 a share, on $10 billion in revenue.

Morgan Stanley, the smallest of the major American banks, is the last to report earnings in a tough quarter for high finance. A decline in longer-term interest rates, spurred by the Federal Reserve's recent shift to possibly lower rates, caused some corporate borrowers to pull back. And global trade tensions quieted securities trading, even as stock-market indexes plumbed new highs.

"People don't have much conviction, at these levels, in this rally," said Morgan Stanley's finance chief, Jonathan Pruzan.

Instead, consumer businesses drove higher profits at JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co. and Bank of America Corp. Morgan Stanley and Goldman Sachs Group Inc., which also lacks a large consumer presence, were the only two big U.S. banks to report quarterly profits that were lower than a year ago.

Morgan Stanley has a giant retail brokerage but lacks the mortgage and credit-card operations that are booming at rivals. Instead, cost control and gains on principal investments -- including a stake in a trading platform that went public in April -- helped paper over weaker results in the firm's trading and investment banking arms.

The bank's return on equity, a measure of profitability, was 11.2%. Other banks ranged from 10% at Citigroup to 16% at JPMorgan.

Chief Executive James Gorman has steered Morgan Stanley into steadier businesses since the financial crisis, doubling down on money management and cutting riskier kinds of trading. Earlier this year he struck a deal to buy a software firm that helps corporate employees manage their finances, and plans to build out Morgan Stanley's retirement-account offerings.

Mr. Gorman said he isn't getting enough credit for that transformation. On Thursday, he took aim at new capital rules that will hit Morgan Stanley harder than some peers. "We're still suffering from the deeds at this firm 10 years ago, and my attitude is we're a very, very different firm now," he said. "This is 2019, not 2009."

The firm kept a lid on expenses, down 3% so far this year, and was particularly tight in allocating bonuses for its bankers and traders, whose total accrued compensation for the year so far is just 35% of the revenue they have made.

The wealth division, which manages about $2.5 trillion for U.S. clients, reported a 2% rise in quarterly revenue to $4.4 billion. Twenty-eight percent of that dropped to the bottom line in profit, a record for Morgan Stanley and above the range Mr. Gorman set out to crack three years ago.

Trading revenue fell 12% from a year ago. Stock trading revenue fell 14% to $2.13 billion, still good for first among big banks. Morgan Stanley jealously guards its pole position in equities, having spent heavily on technology in the early 2010s to dethrone Goldman.

The firm said hedge funds borrowed less in the quarter, a sign they aren't sure enough of which way markets are heading to juice their bets with debt.

Meanwhile, revenue was down 18% in fixed-income trading, where Morgan Stanley is smaller than peers after firing a quarter of the staff in 2016 and trimming assets.

Morgan Stanley's investment-banking revenue fell 13%, though executives said its pipeline of unannounced deals was full. Morgan Stanley is a big merger adviser and stock underwriter, and so tends to feel slowdowns there more acutely than rivals.

Across the industry there were 8% fewer completed M&A deals in the quarter, collectively worth nearly 50% less, compared with a year earlier, according to FactSet. And while a flood of highly anticipated technology companies went public this spring, issuance of secondary shares and convertible bonds has been slower than in 2018.

The biggest gains came from Morgan Stanley's asset-management arm, where revenue grew 21%. Growing that business, which manages just under $500 billion and is a blip on the firm's bottom line, is a priority for Mr. Gorman, who has hinted he would like to do a deal.

Morgan Stanley's total deposits grew 2% to $177 billion while loans grew 4% to $258 billion, led by mortgages. Morgan Stanley has been rebooting its home-lending operation, which was for years a problematic and small business that it outsourced. In 2017 it brought the effort in-house and recently began pricing loans more competitively.

"We slowed it down to make sure that we got it right and now we're in a better position," Mr. Pruzan said Thursday.

The move is part of the firm's push into plain-vanilla banking, to get at what it estimates is $2 trillion that its individual clients keep at other banks. A decade after converting into a bank holding company during the financial crisis, Morgan Stanley still doesn't issue its own credit cards, write many mortgages or offer competitive savings and checking accounts.

The stock closed up 1.5% Thursday.

Write to Liz Hoffman at liz.hoffman@wsj.com and Peter Rudegeair at Peter.Rudegeair@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
BANK OF AMERICA 2.97% 27.03 Delayed Quote.6.53%
CITIGROUP INC. 3.52% 63.48 Delayed Quote.21.94%
GOLDMAN SACHS GROUP INC 1.65% 199.42 Delayed Quote.19.38%
JP MORGAN CHASE & COMPANY 2.40% 107.72 Delayed Quote.7.76%
MORGAN STANLEY 2.15% 39.94 Delayed Quote.0.73%
WELLS FARGO & COMPANY 2.33% 44.39 Delayed Quote.-3.67%
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on JP MORGAN CHASE & COMPANY
08/16LIVESTOCK HIGHLIGHTS : Top Stories of the Day
DJ
08/16Investors Flock to Gold ETFs
DJ
08/16MARKETS RIGHT NOW : Stocks end turbulent week broadly higher
AQ
08/16Financials Up as Treasury Yields Recoup Some Losses -- Financials Roundup
DJ
08/16Trump held conference call with big bank CEOs amid market turmoil - source
RE
08/16WILBUR ROSS : Invesco thrives in China as former executive Ross leads Trump's tr..
RE
08/15JP MORGAN CHASE MPANY : JPMorgan Chase Declares Preferred Stock Dividends
PU
08/15JP MORGAN CHASE MPANY : CORRECTING and REPLACING PHOTO IHG® Rewards Club Premier..
BU
08/15JP MORGAN CHASE MPANY : Thinking about trading options or stock in Walt Disney C..
PR
08/14Embattled Bank Stocks Lose Billions -- Update
DJ
More news
Financials (USD)
Sales 2019 113 B
EBIT 2019 48 072 M
Net income 2019 32 851 M
Debt 2019 -
Yield 2019 3,15%
P/E ratio 2019 10,6x
P/E ratio 2020 10,3x
Capi. / Sales2019 3,04x
Capi. / Sales2020 2,99x
Capitalization 344 B
Chart JP MORGAN CHASE & COMPANY
Duration : Period :
JP Morgan Chase & Company Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends JP MORGAN CHASE & COMPANY
Short TermMid-TermLong Term
TrendsBearishNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 29
Average target price 118,88  $
Last Close Price 107,72  $
Spread / Highest target 30,0%
Spread / Average Target 10,4%
Spread / Lowest Target -21,1%
EPS Revisions
Managers
NameTitle
James Dimon Chairman & Chief Executive Officer
Gordon A. Smith Co-President & Co-Chief Operating Officer
Daniel E. Pinto Co-President & Co-Chief Operating Officer
Yan Tavrovsky President & Chairman-Management Board
Marianne Lake Chief Financial Officer & Executive Vice President
Sector and Competitors
1st jan.Capitalization (M$)
JP MORGAN CHASE & COMPANY7.76%336 326
INDUSTRIAL AND COMMERCIAL BANK OF CHINA4.54%267 910
BANK OF AMERICA6.53%244 343
WELLS FARGO & COMPANY-5.86%191 137
CHINA CONSTRUCTION BANK CORPORATION11.15%184 753
HSBC HOLDINGS PLC-7.68%144 687