Earnings

Chase: Consumer Spend Buoys JPMorgan Results, QuickPay Quickens

Wall Street

Not a bad report from JPMorgan Chase, which released its earnings on Thursday (July 14) — even if it did have to write down its investment in Square (undisclosed as to how much). There were also some tidbits about FinTech, voiced by none other than banking titan and CEO Jamie Dimon.

First, the headline numbers. The nation’s largest bank, as measured by assets, said that net income, on an adjusted basis, came in at $1.55, which was higher than the $1.43 consensus. The revenues, up 3 percent to $25.2 billion, were driven by double-digit growth in consumer bank deposits. The total loan book, where real estate demand grew, was up 16 percent.

That credit growth came despite a much anticipated drop in energy-related business and loans, which was hurt by low energy prices. The provision for losses taken on the back of the beleaguered energy sector was $1.4 billion, up nearly 50 percent from less than $1 billion last year. The culprit was oil and gas exposure.

And in a signal that (corporate and institutional) investors remain sanguine about their holdings — at least in the M&A space and corporate finance, rather than the stock markets — corporate and investment banking revenues were up 5 percent. Drilling down, fixed income revenues were up 35 percent year over year.

Brexit — top of mind for at least a few analysts on the call, with management acknowledging that no one really knows what or when the financial impact will really be felt.

Looking at the mobile space, the firm said that its mobile customer base has grown 18 percent year over year, topping 22 million users, and remains the largest base among banking firms in the U.S. Marianne Lake, CFO of the company, and Dimon noted that, along with the strength in the consumer business, the clearXchange interbank network remains on track with its rollout, with the latter executive noting that P2P payments have been on the forefront of the JPMorgan FinTech agenda for the firm and that payments would be able to be sent between retail customers of JPM, Bank of America and U.S. Bancorp. Dimon said the service would cover 60 percent of U.S. bank accounts. “So, you will be able to get P2P real time through Chase QuickPay,” said Dimon.

With reference to QuickPay, the PayPal (Venmo) competitor, volumes moved through the service topped $21 billion in 2015, with Dimon noting that a “special app” is in the works.

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