JPMorgan Chase & Co.’s Card, Merchant Services & Auto unit on April 11 reported a 4 percent drop in net revenue for the first quarter ended March 31, to $4.5 billion. Net income also was down, by 15 percent, to $1.1 billion, driven by lower net revenue and higher provision for credit losses, the company said in its earnings announcement.
Net interest income was $3.3 billion, down $202 million year over year, predominantly driven by spread compression in credit card and auto loans. Noninterest revenue was $1.3 billion, down 1 percent, Chase said.
The unit's provision for credit losses was $763 million, down 11.2 percent. The current-quarter provision reflected lower net charge-offs and a $250 million reduction in the allowance for loan losses, Chase said. The prior-year provision included a $500 million reduction in the allowance for loan losses.
The credit card net charge-off rate for the quarter was 2.93 percent, down from 3.55 percent a year ago. The 30+ day delinquency rate was 1.61 percent, down from 1.94%. Noninterest expense was $2 billion, up 1%.
Period-end credit card loan balances were $121.8 billion, flat from a year earlier. Credit card average loans were $123.3 billion, also flat.
Card Services net revenue as a percentage of average loans was 12.22%, down from 12.83% a year earlier. Credit card sales volume for the quarter was $104.5 billion, up 10%.
Merchant-processing volume was $195.4 billion, up 11 percent from a year earlier. Total transactions processed were 9.1 billion, up 10 percent
Active mobile customers were up 24 percent over the prior year, to 16.4 million.
As a company, Chase earned $10.46 billion in revenue for the quarter, down 10 percent from a year earlier. Net income was down 25 percent, to $1.94 billion.
“We have growing confidence in the economy – consumers, corporations and middle market companies are in increasingly good financial shape and housing has turned the corner in most markets – and we are doing our part to support the recovery,” Jamie Dimon, Chase chairman and CEO, said in the company’s earnings statement. “JPMorgan Chase provided credit and raised capital of over $450 billion for our clients during the first quarter of 2014, which included $5 billion for U.S. small businesses.”
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