JPMorgan Chase Q1 net income rises by 6 percent

NEW YORK: Largest US bank by assets reports another solid quarter but repeats warning that net interest income not sustainable and posts increase in non-interest expenses. Chase has reported net income of $13.4bn, up 6 percent, year-over-year. Net revenue of $42.5bn is up by 8 percent, or up 4 percent excluding its First Republic acquisition. Net interest income continues to rise sharply, ahead by 11 percent y-o-y or up 5 percent excluding First Republic. Non-interest revenue of $19.3bn is ahead by 5 percent y-o-y.

The current quarter reflects higher asset management fees and higher Investment Banking fees. This is predominantly offset by lower CIB Markets non-interest revenue. One negative metric is a 13 percent rise in non-interest expenses. This is driven by higher compensation. Notably, headcount rises by 2,000 from a year ago or 5 percent to almost 312,000 employees.

The provision for credit losses of $1.9bn reflects net charge-offs of $2.0bn and a net reserve release of $72m. Average loans are up 16 percent, or up 3 percent excluding First Republic. Average deposits are up 2 percent, or flat excluding First Republic. Consumer and community banking net income falls by 8 percent to $4.8bn but revenue rises by 7 percent to $17.7bn. Net income was $4.8 billion, down 8 percent, or down 15 percent excluding First Republic. Net revenue was $17.7 billion, up 7 percent, or up 1 percent excluding First Republic. Banking and Wealth Management net revenue of $10.3bn is ahead by 3 percent. Channel highlights include a 7 percent y-o-y rise in active mobile banking customers.

Jamie Dimon, Chairman and CEO, said: “We reported strong results in the first quarter, delivering net income of $13.4bn or $14.0 excluding a $725m increase to the FDIC special assessment. Last month, we announced a 10 percent increase to the common dividend. Our exceptionally high CET1 capital ratio of 15.0 percent and peer-leading returns provide us with the capacity and flexibility to both reinvest for growth and maintain an attractive capital-return profile, without compromising our fortress balance sheet.