JPMORGAN CHASE & CO Quarterly Report for Q2 Ended Jun 30, 2018

Summary

JPMorgan Chase & Co. reported a strong second quarter of 2018, with net income increasing 18% year-over-year to $8.3 billion, or $2.29 per diluted share, on total net revenue of $27.8 billion, up 8% year-over-year. This performance was driven by higher net revenue and the positive impact of the lower U.S. federal statutory income tax rate following the Tax Cuts and Jobs Act, partially offset by increased noninterest expense. The firm demonstrated solid profitability with a Return on Common Equity (ROE) of 14% and a Return on Tangible Common Equity (ROTCE) of 17%. Key drivers for the revenue growth included a 10% increase in net interest income, attributed to higher rates and loan growth, and a 6% increase in noninterest revenue, boosted by stronger performance in Markets, investment banking fees, and auto lease income. The provision for credit losses remained flat year-over-year at $1.2 billion, and the firm reported a healthy loan loss coverage ratio of 1.22% (excluding PCI loans). Capital ratios remained robust, with a Common Equity Tier 1 (CET1) ratio of 12.0%. The firm also announced its intention to increase the quarterly common stock dividend to $0.80 per share, effective Q3 2018, and authorized a new common equity repurchase program of up to $20.7 billion. All business segments (Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking, and Asset & Wealth Management) delivered strong results, with notable ROE improvements across most segments.

Key Highlights

• 1Net income for Q2 2018 increased 18% year-over-year to $8.3 billion ($2.29 per diluted share) on total net revenue of $27.8 billion, up 8% year-over-year.
• 2Return on Common Equity (ROE) was 14% and Return on Tangible Common Equity (ROTCE) was 17%.
• 3Net interest income grew 10% to $13.5 billion, driven by higher rates and loan growth.
• 4Noninterest revenue increased 6% to $14.3 billion, boosted by strong performance in Markets, investment banking fees, and auto lease income.
• 5Provision for credit losses remained flat at $1.2 billion, with a strong loan loss coverage ratio of 1.22% (excluding PCI loans).
• 6Capital position remained strong, with a Basel III Fully Phased-In CET1 capital ratio of 12.0%.
• 7The firm announced a dividend increase to $0.80 per share and authorized a $20.7 billion common equity repurchase program.

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