JPMorgan Q3 2023 results beat analyst forecasts on net income and net revenue. Net income rises by 35% y-o-y to $13.2bn or by 24% excluding First Republic. Chase acquired First Republic in May after the regional lender was seized by financial regulators. Net revenue of $40.7bn is up by 21%, or up 15% excluding First Republic.

JPMorgan Chase Q3 2023 highlights

Net interest income of $22.9bn is ahead by 30% y-o-y. It rises by 21% on an underlying basis. The rise is driven by higher rates and higher revolving balances in card services, partially offset by lower deposit balances. Noninterest revenue of $17.8bn is up 12%, or up 8% excluding First Republic. This is driven by higher CIB Markets non-interest revenue, higher asset management fees and lower net investment securities losses in Corporate compared to the prior year. This is partially offset by an impairment of an equity investment in Payments.

Consumer and community banking net income rises by 36% y-o-y, or 22% excluding First Republic, to $5.9bn. Net revenue rises by 29% or 19% on an underlying basis to $18.4bn.

Wealth Management net revenue of $11.3bn is up 43%, or up 30% excluding First Republic. This is driven by higher net interest income, reflecting higher deposit margins, partially offset by lower balances. Home Lending net revenue of $1.3bn is up 36%, or down 2% excluding First Republic. This is driven by lower net interest income largely due to tighter loan spreads, predominantly offset by higher servicing and production revenue. Card Services & Auto net revenue of $5.8bn is up 7%, driven by higher card services net interest income on higher revolving balances, partially offset by lower auto operating lease income.

‘Another quarter of solid results’

Jamie Dimon, Chairman and CEO, said: “Another quarter of solid results, generating net income of $13.2bn and an ROTCE of 22%. We acknowledge that these results benefit from our over-earning on both net interest income and below normal credit costs, both of which will normalise over time.

Our CET1 capital ratio rose even further to 14.3%. Our total loss-absorbing capacity (equity plus long-term debt) is a formidable $496bn, while loans, which are our riskiest assets, are at $1.3trn.

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“Our lines of business saw continued momentum in the quarter, demonstrating the power of our years of investment and the value of our consistency and fortress principles. Across the Firm, we continued to add a sizable number of new clients and deepen relationships. In CCB, we again ranked #1 in US retail deposits based on the most recent FDIC data. We extended our leadership position as our growth from net new accounts was over 3x that of peers. In CIB, we maintained our #1 Dealogic rank and gained IB market share YTD. In CB, Payments revenue remained strong and was up 30%. And AWM saw AUM net inflows of $60bn. Finally, we extended credit and raised $1.7trn in capital for businesses, governments, and US consumers year to date.”

Credit costs of $1.4bn include $1.5bn of net charge-offs and a $113m net reserve release. Other highlights include debit and credit card ales volume by 8%. Active mobile banking customer numbers rise by 9%.

JPMorgan Chase Q3 2023 less positive metrics

While average loans are by 17%; average deposits are down by 4%. Non-interest expense of $9.1bn is up 14%, or up 7% excluding First Republic. This is driven by higher compensation including an increase in headcount, continued investments in technology and marketing and the FDIC assessment increase announced in the prior year, partially offset by lower auto lease depreciation.

Markets & Securities Services revenue of $7.7bn is down 2%. Markets revenue of $6.6bn is down 3%.

‘May be the most dangerous time the world has seen in decades.”

Dimon added: “Currently, US and businesses generally remain healthy, although, consumers are spending down their excess cash buffers. However, persistently tight labour markets as well as extremely high government debt levels with the largest peacetime fiscal deficits ever are increasing the risks that inflation remains elevated and that interest rates rise further from here.

“Additionally, we still do not know the longer-term consequences of quantitative tightening, which reduces liquidity in the system at a time when market-making capabilities are increasingly limited by regulations. Furthermore, the war in Ukraine compounded by last week’s attacks on Israel may have far-reaching impacts on energy and food markets, global trade, and geopolitical relationships. This may be the most dangerous time the world has seen in decades.”