Banking & Finance

JPMorgan Consumer Banking Lifts Q1 Results

Paul Ausick

JPMorgan Chase & Co. (NYSE: JPM) reported first-quarter 2019 results before markets opened Friday. The investment bank and financial services giant posted diluted earnings per share (EPS) of $2.65 on managed (adjusted) revenue of $29.9 billion. In the same period a year ago, the big bank said it had EPS of $2.37 on managed revenue of $28.52 billion. Third-quarter results also compare to the consensus estimates for $2.35 in EPS on $28.44 billion in revenue.

Quarterly profits rose by 5% from $8.71 billion in the first quarter of 2018 to $9.18 billion. Net interest income totaled $14.6 billion, up 8%, driven by the impact of higher rates along with balance sheet growth and mix. The bank’s income tax expense rose by $104 million, an increase of 5%.

Noninterest revenue reached $15.3 billion, up 1% year over year. The bank attributed the year-over-year increase to higher investment banking fees and auto lease income and the absence of a $505 million gain on an accounting change. The increase was partially offset lower Markets revenue.

Provision for credit losses was $1.5 billion, an increase of 28% year over year.

By divisions, net income in the consumer and community banking group rose by 19% to $3.96 billion, commercial banking net income rose by 2% to 1.05 billion and asset management group net income fell 14% to $661 million for the quarter.

Corporate and investment banking group net income fell 18% to $3.25 billion and revenues were down 6% to $9.85 billion. Markets revenue of $5.5 billion was down 17%, reflecting lower fixed-income revenue of $3.7 billion driven by lower client activity.

Provision for credit losses in the group rose to $87 million, compared to a benefit of $158 million in the prior-year quarter.

Bank CEO Jamie Dimon said:

Even amid some global geopolitical uncertainty, the U.S. economy continues to grow, employment and wages are going up, inflation is moderate, financial markets are health and consumer and business confidence remains strong.

The bank did not offer guidance in its press release, but the consensus estimates call for second-quarter EPS of $2.52 on revenues of $29.01 billion. The EPS estimate for the 2019 fiscal year is $9.70, on revenues of $113.9 billion.

Shares traded up about 3.6% to $110.07 just after Friday’s opening bell. The 52-week range is $91.11 to $119.24, and the consensus 12-month price target was $115.48 before results were announced.