JPMC Posts Surge in 3Q Profits Driven by Release of Credit Reserves

Third-quarter profits exceeded expectations at J.P. Morgan Chase, with a 24% surge in net income of $11.7 billion, an increase of $2.2 billion, the largest U.S. bank said in a statement on Wednesday (Oct. 13).

The increase was largely driven by the release of $2.1 billion in credit reserves, $524 million in charge-offs and a $566 million 2020 tax credit. By way of comparison, last year’s credit reserve releases totaled $569 million.

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Excluding the increase from the credit reserves release and tax benefit, J.P. Morgan Chase showed a profit of $9.6 billion in the third quarter. Net revenue was $30.4 billion, up 2%.

J.P. Morgan Chase Chairman and CEO Jamie Dimon said the strong results come as the economy recovers from the worldwide COVID-19 pandemic, resulting delta variant and continuing supply chain bottlenecks. While the release of credit reserves benefits the bank, “we do not consider these scenario-driven releases core or recurring profits,” he noted.

He added that the third quarter included the opening of new branches; J.P. Morgan Chase is the first financial institution to have locations in 48 states. The FI is also growing its retail banking operations in the U.K.

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“We are more than halfway through our plan to open 400 branches in new markets by the end of 2022, with approximately 30% of these branches in low- to moderate-income communities,” Dimon said.

Overall consumer revenue is down 3% from 2020. While spending is up 30% on Chase consumer credit cards, balance totals are lower. Mortgage originations increased by 43% and car loans went up 1%.

Corporate and investment bank revenue increased 7%, with trading revenue down 5%, per the statement. Fees related to investment banking surged 52% to a record $3.3 billion. Advisory fees tripled from 2020 to $1.23 billion due to an increase in the number of mergers.