JPMorgan Chase Opens Earnings Season With Card Loan Growth, Mobile Additions

JPMorgan Chase posted results that helped kick off earnings season Friday morning. The firm showed traction in its loan book, mobile efforts and credit card portfolio.  The headline numbers showed the largest U.S. bank (as measured by its asset base) beat Wall Street expectations.

In remarks delivered in tandem with the earnings release, CEO Jamie Dimon said, “The U.S. consumer remains healthy, evidenced in our strong underlying performance in Consumer & Community Banking. Loans and deposits continue to grow strongly, and card sales and merchant processing volumes were up double digits, reflecting our consistent investment in the business.”

The company earned $1.82 per share on record net income of more than $7 billion, beating the Street at $1.58. Revenue of $26.4 billion edged projections of $25.4 billion, driven by a boost in net interest income.  The bank said the average core loan book jumped eight percent from last year, and two percent sequentially.  The average core loan portfolio now stands at $824.6 billion.

JPMorgan said that its mobile customers were up 14 percent year over year to 28.4 million, compared with 24.8 million last year.   That continues a trend seen in recent years, where the branch footprint has been shrinking, from more than 5,300 last year to a current base of just over 5,200.

Both mobile and the growth in card business, said CFO Maryann Lake on the conference call following earnings, helped boost consumer and consumer banking results, with core loans up 9 percent and deposits up 10 percent year on year.  Looking at the total book, management guided core loan growth to eight percent going forward year over year.

Card sales volume was $156.8 million, and merchant processing volume was $294.4 million, comparing favorably to $136 million and $263.8 million, respectively.  Lake said revenue run rates for the card segment, helped by Sapphire Reserve and other new accounts, should be north of 11 percent year on year going forward.

The total dollar volume connected to charge-offs was $1.1 billion in the second quarter, versus $1 billion last year.  Supplemental earnings presentations showed that credit card charge-offs were “still within [previous] guidance” of a bit less than three percent, Lake said, and should see improvement based on seasonality later in the year.

Dimon said the company, addressing loan growth, was “adding more and more online things” across credit approval and merchant processing, especially in middle-market loans – “this is going to grow for a long period of time.”

Notably, and in response to an analyst question about the state of the U.S. economy, Dimon said, in a lengthy exposition marked with an expletive, that, “Since the Great Recession … now 8 years old, we’ve been growing at 1.5 to 2 percent in spite of stupidity and political gridlock, because the American business sector is powerful and strong,” he said. “What I’m saying is that it would be much stronger growth if there were more intelligent decisions and less gridlock.”