JPMorgan Chase Posted Muted Results and Guidance, CEO Voiced Worries about State of U.S. Economy

On April 13, 2022 the JPMorgan Chase company (JPM) kicked off the earnings reporting season and announced financial results for 1 quarter of 2022 financial year which ended on March 31, 2022. JPM stock dropped nearly 3% yesterday after the bank disclosed having added to credit reserves in Q1 to reflect increased probability of downside risks and recorded losses related to widening spreads, commodities exposures and Russia-discontinuation-related markdowns. Reported revenue was $30.7 billion.

The average size of loans issued increased by 5%; average deposits increased by 13%. The bank has accumulated $1.7 trillion in cash liquidity.

CCB segment (deposit and investment products and services for consumers): average deposit increased by 18%; client investment assets grew by 9%.

CCB segment: average loan size down 1% yoy and down 2% QoQ; Sales volume from debit and credit cards increased by 21%; Active mobile app customers grew by 11%.

Investment Banking: Total revenue was $8.8 billion, down 3% from previous results, with fixed income markets down 1% and equity markets down 7%.

Gross investment banking income was $729 million, down 35% from previous results. The average size of loans grew by 2% YoY. and grew by 2% QoQ; average deposits grew by 9%.

Assets under management (AUM) rose to $3 trillion. dollars, providing growth by 4%. The average size of loans increased by 14% yoy. and 3% QoQ; average deposits rose 39%.

Declared a $3 billion dividend or $1 per share and a $1.7 billion common share repurchase in 1Q 2022.

Bottom line: JPMorgan Chase generated $30bn in revenue and $8.3bn in profit in 1Q 2022. Credit profile maintained, with average company-wide loans up 5%, while credit losses remain at historically low levels. The company remains optimistic about the economy, at least in the short term – saying consumer and business balance sheets and consumer spending remain healthy – but there could be major geopolitical and economic challenges ahead due to high inflation and supply chain issues.