Earnings

Chase Sees Active Mobile Customers, Card Loans Grow in Q3

JPMorgan Mobile Customers Gain 12 Pct. YOY

Amid the companies kicking off earnings season, JPMorgan Chase and Co. reported results that showed consumer spending remains resilient in the face of global macro pressures. Its card loans are up high single digits – which, at a company level, shows continued traction in digital and mobile banking efforts.

Headline numbers released on Tuesday (Oct. 15) show that earnings per share came in at $2.68, beating expectations by 23 cents. The consolidated top line grew by 8 percent to $29.3 billion, and topped the Street at $28.5 billion. Net interest income was up 2 percent to $14.4 billion.

The Street may have been focused on trading and fixed income revenues, but drilling down into the numbers a bit finds that the consumer segment was a strong driver of results, even as core loans were down to $900.6 billion, compared to $905.8 billion in the third quarter of last year.

The consumer banking unit saw revenues rise by 7 percent to $14.3 billion. Credit card loans at the end of the period, as illuminated in supplemental materials released by the company, stood at $159.6 billion, up 8 percent year on year, and up 1 percent sequentially. That helped to drive card, merchant service and auto-related revenues up 9 percent year on year to $6.1 billion (auto loans themselves were down 3 percent year on year to $61.4 billion).

In reference to digital efforts, the supplementals reveal that active digital customers were up 7 percent to 51.8 million, and active mobile customers were up at a relatively accelerated rate, rising 12 percent to 36.5 million.

Total branch count was down 2 percent to 4,949.

On the conference call with analysts, CFO Jennifer Piepszak said that in terms of card spend, the fourth quarter remains a seasonally high period. Spending on technology continues to be disciplined, she and CEO Jamie Dimon noted on the call, focused in part on digital self-service offerings to users and anti-fraud efforts that are driving productivity gains. Piepszak said that call center productivity, in particular, had been increasing.

But the macro picture remains mixed. Piepszak noted that marginal investment by the business is being impacted. While management stated that the overall consumer profile remains strong, Dimon took note of geopolitics and the impact of the trade dispute between China and the U.S., where it’s too soon to tell if a recession lies ahead.

Credit-related information contained in the supplementals shows that the total allowance for loan losses was $8.9 billion, down 2 percent year on year. Within that tally, the consumer and business banking loan loss allowances were down 6 percent to $746 million, while card-related loan losses were up 11 percent to $5.6 billion (the net charge-off rate was 2.9 percent, up four basis points from a year ago. Auto loan loss allowances were flat at $465 million in the latest period.

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