JPMORGAN CHASE & CO.

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JPMorgan Chase : 1Q22 Earnings Press Release

04/13/2022 | 07:06am EDT

JPMorgan Chase & Co.

383 Madison Avenue, New York, NY 10179-0001 NYSE symbol: JPM www.jpmorganchase.com

JPMORGAN CHASE REPORTS FIRST-QUARTER 2022 NET INCOME OF $8.3 BILLION ($2.63 PER SHARE)

FIRST-QUARTER 2022 RESULTS1

Firmwide Metrics

CCB

ROE 23%

CIB

ROE 17%

CB

ROE 13%

AWM

ROE 23%

ROE 13%

CET1 Capital Ratios3

Net payout LTM4,5

ROTCE2 16%

Std. 11.9% | Adv. 12.6%

64%

  • n Reported revenue of $30.7 billion; managed revenue of $31.6 billion2

  • n Credit costs of $1.5 billion included a $902 million net reserve build and $582 million of net charge-offs

  • n Average loans up 5%; average deposits up 13%

  • n $1.7 trillion of liquidity sources, including HQLA and unencumbered marketable securities6

n Average deposits up 18%; client investment assets up 9%

n

Average loans down 1% YoY and down 2% QoQ; Card net charge-off rate of 1.37%

n Debit and credit card sales volume7 up 21% n Active mobile customers8 up 11%

n

#1 ranking for Global Investment Banking fees with 8.0% wallet share in 1Q22

n Total Markets revenue of $8.8 billion, down 3%, with

Fixed Income Markets down 1% and Equity Markets down 7%

n Gross Investment Banking revenue of $729 million,down 35%

n

Average loans up 2% YoY and up 2% QoQ; average deposits up 9%

n Assets under management (AUM) of $3.0 trillion, up

4%

n

Average loans up 14% YoY and 3% QoQ; average deposits up 39%

Jamie Dimon, Chairman and CEO, commented on the financial results: "JPMorgan Chase generated a healthy $30 billion of revenue, $8.3 billion of earnings and an ROTCE of 16% in the first quarter after adding $902 million in credit reserves largely due to higher probabilities of downside risks. Lending strength continued with average firmwide loans up 5% while credit losses are still at historically low levels. We remain optimistic on the economy, at least for the short term - consumer and business balance sheets as well as consumer spending remain at healthy levels - but see significant geopolitical and economic challenges ahead due to high inflation, supply chain issues and the war in Ukraine."

Dimon continued: "In Consumer & Community Banking, deposits were up 18% and client investment assets were up 9%, largely driven by positive net flows. Combined debit and credit card spend was up 21% as we continue to see a pick-up in credit card spending on travel and dining. Card loan balances were up 11% but remain below pre-pandemic levels. Auto loans were up 3% but the lack of vehicle supply continues to affect originations which were down 25%. In Home Lending, originations of $25 billion were down 37%, primarily due to the rising rate environment. In the Corporate & Investment Bank, we maintained our #1 ranking in Global Investment Banking although fees were down 31% due to lower equity and debt underwriting activity. Markets revenue was down 3% compared to a record first quarter last year. Commercial Banking loans were up 2% and we are seeing a pick-up in both new loan demand as well as revolver utilization. Asset & Wealth Management delivered strong results as we saw positive inflows into long-term products of $19 billion across all channels, as well as continued strong loan growth, up 14%, primarily driven by securities-based lending."

Dimon added: "Our financial discipline, constant investment in innovation and ongoing development of our people are what enabled us to persevere in our steadfast dedication to help clients, communities and countries throughout the world even in difficult times. In the quarter, we extended credit and raised capital of $640 billion for large and small businesses, governments and U.S. consumers. Our longstanding capital hierarchy remains the same - first and foremost, to invest in and grow our market-leading businesses; second, to pay a sustainable competitive dividend; and then, to return any remaining excess capital to shareholders through stock buybacks."

Dimon concluded: "Our focus this quarter remained on helping our clients navigate difficult markets and unpredictable events, which included working with governments to implement economic sanctions of unprecedented complexity. While our company will continue to deal with this global turmoil, our hearts go out to the extreme suffering of the Ukrainian people and to all of those affected by the war."

SIGNIFICANT ITEMS n 1Q22 results included: n $902 million net credit reserve build Firmwide ($0.23 decrease in earnings per share (EPS))

n $524 million of losses within Credit Adjustments & Other in CIB driven by funding spread widening as well as credit valuation adjustments relating to both increases in commodities exposures and markdowns of derivatives receivables from Russia-associated counterparties ($0.13 decrease in EPS)

CAPITAL DISTRIBUTED

  • n Common dividend of $3.0 billion, or $1.00 per share

  • n $1.7 billion of common stock net repurchases in 1Q225

  • n The Firm's Board of Directors has authorized a new common equity share repurchase program of $30 billion, effective May 1, 20225

FORTRESS PRINCIPLES

  • n Book value per share of $86.16, up 5%; tangible book value per share2 of $69.58,

    up 5%

  • n Basel III common equity Tier 1 capital3 of $208 billion and Standardized ratio3 of

    11.9%; Advanced ratio3 of 12.6%

  • n Firm supplementary leverage ratio of 5.2%

OPERATING LEVERAGE

n 1Q22 expense of $19.2 billion; reported overhead ratio of 62%; managed overhead ratio2 of 61%

SUPPORTED CONSUMERS, BUSINESSES & COMMUNITIES n $640 billion of credit and capital9 raised in 1Q22

  • n $69 billion of credit for consumers

  • n $8 billion of credit for U.S. small businesses

  • n $265 billion of credit for corporations

  • n $282 billion of capital raised for corporate clients and non-U.S. government entities

  • n $16 billion of credit and capital raised for nonprofit and U.S. government entities, including states, municipalities, hospitals and universities

Investor Contact: Mikael Grubb (212) 270-2479

Note: Totals may not sum due to rounding

1Percentage comparisons noted in the bullet points are for the first quarter of 2022 versus the prior-year first quarter, unless otherwise specified.

2For notes on non-GAAP financial measures, including managed basis reporting, see page 6. For additional notes see page 7.

Media Contact: Joseph Evangelisti (212) 270-7438

In the discussion below of Firmwide results of JPMorgan Chase & Co. ("JPMorgan Chase" or the "Firm"), information is presented on a managed basis, which is a non-GAAP financial measure, unless otherwise specified. The discussion below of the Firm's business segments is also presented on a managed basis. For more information about managed basis, and non-GAAP financial measures used by management to evaluate the performance of each line of business, refer to page 6.

Comparisons noted in the sections below are for the first quarter of 2022 versus the prior-year first quarter, unless otherwise specified.

JPMORGAN CHASE (JPM)

Results for JPM

4Q21

1Q21

($ millions, except per share data) Net revenue - reported

Net revenue - managed Noninterest expense Provision for credit losses Net income

1Q22 $ 30,717 31,590 19,191

4Q21 $ 29,257 30,349 17,888

1Q21

$ O/(U)O/(U) %

$ O/(U)O/(U) %

$ 32,266

$

1,460 5 % $ (1,549) (5)%

33,119

18,725

  • 1,463 (1,288)

(4,156)

1,241 1,303 2,751

4 7

(1,529) (5)

466 2

  • NM 5,619

NM

$ 8,282

$ 10,399

$ 14,300

$ (2,117)

(20)%$ (6,018) (42)%

Earnings per share - diluted Return on common equity

$

Return on tangible common equity

2.63 13 % 16

$

3.33 16 % 19

$

4.50 23 % 29

$

(0.70)

(21)% $

(1.87) (42)%

Discussion of Results:

Net income was $8.3 billion, down 42%, predominantly driven by a net credit reserve build of $902 million compared to a net credit reserve release of $5.2 billion in the prior year.

Net revenue was $31.6 billion, down 5%. Net interest income (NII) was $14.0 billion, up 7%. NII excluding Markets2 was $11.8 billion, up 9%, predominantly driven by balance sheet growth and higher rates, partially offset by lower NII associated with PPP loans. Noninterest revenue was $17.6 billion, down 12%, driven by lower Investment Banking fees, losses on legacy equity investments compared to gains in the prior year and $394 million of net investment securities losses in Corporate, and lower net production revenue in Home Lending. The decrease also reflects a loss in Credit Adjustments & Other in CIB related to funding spread widening as well as credit valuation adjustments relating to both increases in commodities exposures and markdowns of derivatives receivables from Russia-associated counterparties.

Noninterest expense was $19.2 billion, up 2%, predominantly driven by investments and structural expense, largely offset by lower volume- and revenue-related expense, including revenue-related compensation in CIB. The prior year expense included a $550 million contribution to the Firm's Foundation.

The provision for credit losses was $1.5 billion, reflecting a net reserve build of $902 million driven by increasing the probability of downside risks due to high inflation and the war in Ukraine, as well as accounting for Russia-associated exposure in CIB and AWM, and $582 million of net charge-offs. The net reserve build in the current year was comprised of $776 million in Wholesale, including $426 million in CIB, and $127 million in Consumer. Net charge-offs of $582 million were down $475 million, driven by Card. The prior year provision was a net benefit of $4.2 billion, reflecting a net reserve release of $5.2 billion and $1.1 billion of net charge-offs.

CONSUMER & COMMUNITY BANKING (CCB)

Results for CCB

($ millions)

1Q22

4Q21

1Q21

O/(U) %

Net revenue

$ 12,229

$ 12,275

$ 12,517

$

(46)

- % $

(288)

(2)%

Consumer & Business Banking

6,062

6,172

5,635

(110)

(2)

427

8

Home Lending

1,169

1,084

1,458

85

8

(289)

(20)

Card & Auto

4,998

5,019

5,424

(21)

-

(426)

(8)

Noninterest expense

7,720

7,754

7,202

(34)

-

518

7

Provision for credit losses

678

(1,060)

(3,602)

1,738

NM

4,280

NM

Net income

(57)%

Discussion of Results10:

$

2,895$

4,147$

6,787$ (1,252)

(30)%$ (3,892)Net income was $2.9 billion, down 57%, reflecting the absence of the net credit reserve release recorded in the prior year. Net revenue was $12.2 billion, down 2%.

Consumer & Business Banking net revenue was $6.1 billion, up 8%, predominantly driven by growth in deposits and client investment assets, partially offset by deposit margin compression. Home Lending net revenue was $1.2 billion, down 20%, predominantly driven by lower production revenue from lower margins and volume, largely offset by higher net mortgage servicing revenue. Card & Auto net revenue was $5.0 billion, down 8%, on strong new Card account originations leading to higher acquisition costs and lower Auto operating lease income, partially offset by higher Card net interest income on higher revolving balances.

Noninterest expense was $7.7 billion, up 7%, driven by higher investments and structural expense, partially offset by lower volume- and revenue-related expense, primarily auto lease depreciation.

The provision for credit losses was $678 million, reflecting net charge-offs of $553 million, down $470 million, driven by Card. The prior year provision reflected a $4.6 billion reserve release.

CORPORATE & INVESTMENT BANK (CIB)

Results for CIB

4Q21

1Q21

($ millions) Net revenue

1Q22

4Q21

1Q21

$ O/(U)O/(U) %

$ O/(U)O/(U) %

$ 13,529

$ 11,534

$ 14,605

$

Banking

4,232

5,270

4,508

Markets & Securities Services

9,297

6,264

10,097

Noninterest expense

7,298

5,827

7,104

1,995 (1,038) 3,033 1,471

17 % $ (1,076) (7)%

(20) 48 25

  • (276) (6)

  • (800) (8)

  • 194 3

    Provision for credit losses Net income

    445

    (126)

    (331)

    • 571 NM

  • 776 NM

$

4,385$

4,543$

5,924$

(158)

(3)%$ (1,539)

(26)%

Discussion of Results10:

Net income was $4.4 billion, down 26%, with net revenue of $13.5 billion, down 7%.

Banking revenue was $4.2 billion, down 6%. Investment Banking revenue was $2.1 billion, down 28%, driven by lower Investment Banking fees, down 31%, reflecting lower equity and debt underwriting fees. Payments revenue was $1.9 billion, up 33% and included net gains on equity investments. Excluding these net gains, revenue was up 9%, predominantly driven by higher fees, deposits and interest rates. Lending revenue was $321 million, up 21%, predominantly driven by mark-to-market gains on hedges of accrual loans compared to losses in the prior year.

Markets & Securities Services revenue was $9.3 billion, down 8%. Markets revenue was $8.8 billion, down 3%. Fixed Income Markets revenue was $5.7 billion, down 1%, driven by lower performance in Securitized Products, predominantly offset by higher revenue in Currencies & Emerging Markets on elevated client activity in a volatile market. Equity Markets revenue was $3.1 billion, down 7%, driven by lower revenue in derivatives and Cash Equities compared to a strong prior year. Securities Services revenue was $1.1 billion, up 2%, driven by higher rates and fees. Credit Adjustments & Other was a loss of $524 million, driven by funding spread widening as well as credit valuation adjustments relating to both increases in commodities exposures and markdowns of derivatives receivables from Russia-associated counterparties.

Noninterest expense was $7.3 billion, up 3%, driven by higher structural expense, investments in the business and legal expense, largely offset by lower volume- and revenue-related expense including revenue-related compensation.

The provision for credit losses was $445 million, reflecting a net reserve build. The prior year provision was a net benefit of $331 million, reflecting a net reserve release.

COMMERCIAL BANKING (CB)

Results for CB ($ millions) Net revenue Noninterest expense Provision for credit losses Net income

$

  • 2,398 $

    2,612 $

  • 1,129 1,059

157

(89)

2,393 $ 969 (118)

  • (214) (8)% $

    • 5 -%

  • 70 7

    • 160 17

  • 246 NM

  • 275 NM

$

850$

1,234$

1,181$

(384)

(31)%$

(331)

(28)%

Discussion of Results10:

Net income was $850 million, down 28%, largely driven by credit reserve builds compared to reserve releases in the prior year.

Net revenue was $2.4 billion, flat compared to the prior year, as higher payments revenue and deposits were largely offset by lower investment banking revenue.

Noninterest expense was $1.1 billion, up 17%, largely driven by investments in the business and higher volume- and revenue-related expense, including compensation.

The provision for credit losses was $157 million, reflecting a net reserve build.

ASSET & WEALTH MANAGEMENT (AWM)

Results for AWM

($ millions) Net revenue Noninterest expense Provision for credit losses Net income

$

  • 4,315 $

    4,473 $

  • 2,860 2,997

154

(36)

4,077 $ 2,574 (121)

  • (158) (4)% $

    • 238 6 %

  • (137) (5)

    • 286 11

  • 190 NM

  • 275 NM

$

1,008$

1,125$

1,260$

(117)

(10)%$

(252)

(20)%

Discussion of Results10:

Net income was $1.0 billion, down 20%.

Net revenue was $4.3 billion, up 6%, predominantly driven by growth in deposits and loans, as well as higher management and performance fees, partially offset by deposit margin compression and the absence of net valuation gains recorded in the prior year.

Noninterest expense was $2.9 billion, up 11%, predominantly driven by higher structural expense and investments in the business, including compensation, and higher volume- and revenue-related expense, including distribution fees.

The provision for credit losses was $154 million reflecting a net reserve build. The prior year provision was a net benefit of $121 million, reflecting a net reserve release.

Assets under management were $3.0 trillion, up 4%, predominantly driven by cumulative net inflows.

CORPORATE

Results for Corporate ($ millions)

Net revenue Noninterest expense Provision for credit losses Net income/(loss)

$

(881) $ 184 29

(545) $ 251 23

(473) $ 876 16

  • (336) (62)% $

    • (408) (86)%

  • (67) (27)

    • (692) (79)

  • 6 26

  • 13 81

$

(856)$

(650)$

(852)$

(206)

(32)%$

(4)

-%

Discussion of Results10:

Net loss was $856 million, compared with a net loss of $852 million in the prior year.

Net revenue was a loss of $881 million compared with a loss of $473 million in the prior year. Net interest income was a loss of $536 million compared with a loss of $855 million in the prior year, with the increase due to the impact of higher rates. Noninterest revenue was a loss of $345 million compared with revenue of $382 million in the prior year. The current quarter included losses on legacy equity investments compared to gains in the prior year and $394 million of net investment securities losses.

Noninterest expense was $184 million, down $692 million, largely driven by the absence of the contribution to the Firm's Foundation in the prior year.

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

JPMorgan Chase & Co. published this content on 13 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 April 2022 11:04:02 UTC.


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Net income 2022 32 752 M - -
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P/E ratio 2022 10,2x
Yield 2022 3,53%
Capitalization 335 B 335 B -
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James Dimon Director
Daniel E. Pinto President & Chief Operating Officer
Jeremy Barnum Chief Financial Officer & Executive VP
Lori A. Beer Global Chief Information Officer
Rohan Amin Chief Information Security Officer
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