JP MORGAN CHASE(US:JPM)2024-10-11 16:42Financial Data and Key Metrics Changes - The company reported net income of $12.9 billion, EPS of $4.37, and revenue of $43.3 billion, with a ROTCE of 19% [4] - Revenue increased by $2.6 billion or 6% year-on-year, while expenses rose by $808 million or 4% year-on-year to $22.6 billion [5] - Net interest income (NII) excluding markets was up $274 million or 1%, while net interest revenue (NIR) excluding markets increased by $1.8 billion or 17% [5] Business Line Data and Key Metrics Changes - Consumer and Community Banking (CCB) reported net income of $4 billion on revenue of $17.8 billion, down 3% year-on-year [7] - Commercial and Investment Bank (CIB) net income was $5.7 billion on revenue of $17 billion, with investment banking fees up 31% year-on-year [9] - Asset and Wealth Management (AWM) reported net income of $1.4 billion with revenue of $5.4 billion, up 9% year-on-year [12] Market Data and Key Metrics Changes - Average client deposits in the commercial segment were up 7% year-on-year, driven by large corporates [11] - In the markets segment, total revenue was $7.2 billion, up 8% year-on-year, with equities revenue increasing by 27% [10] - Credit costs were $3.1 billion, reflecting net charge-offs of $2.1 billion, predominantly driven by card [5] Company Strategy and Development Direction - The company aims to continue executing its growth strategies, including adding private bankers and expanding wealth management services [27] - Management emphasized the importance of serving clients and maintaining a competitive edge in various lending markets, including direct lending [49] - The company is cautious about deploying excess capital, preferring to wait for better opportunities in a potentially turbulent market [44] Management's Comments on Operating Environment and Future Outlook - Management expects some challenges in the upcoming quarters as normalization continues, but remains optimistic about executing strategies for strong returns [14] - The company anticipates a sequential decline in NII ex-markets in Q4, with expectations for a trough in mid-2025 [20][36] - Management highlighted the competitive landscape, noting the presence of fintech and alternative lenders as significant factors in the market [82] Other Important Information - The CET1 ratio was reported at 15.3%, flat compared to the prior quarter, reflecting higher lending activity and capital distributions [6] - The company added $6 billion in net common share repurchases this quarter [6] Q&A Session All Questions and Answers Question: What are the largest drivers of the sequential decline in NII? - Management indicated that the yield curve is the biggest driver of the expected sequential declines, along with stable checking account balances and changes in CD mix [17][18] Question: Can you elaborate on the expense forecast for next year? - Management acknowledged that expenses are expected to increase due to inflation and growth strategies, with a commitment to maintaining discipline around investments [22][24] Question: How does the company view extending duration in the current environment? - Management stated that extending duration does not change expected NII if the policy rate follows the forwards, and the current inverted curve presents a headwind for short-term NII [30][31] Question: How should shareholders think about capital deployment? - Management emphasized a patient approach to capital deployment, focusing on serving clients and waiting for better opportunities rather than rushing into investments [44][45] Question: What is the company's strategy regarding private credit? - Management highlighted a commitment to offering clients a range of lending options, including direct lending, while maintaining flexibility and competitiveness in the market [49][51]