10-QPeriod: Q3 FY2021

JPMORGAN CHASE & CO Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 2, 2021For Securities:JPMJPM-PCJPM-PDJPM-PKJPM-PLJPM-PMJPM-PJAMJBVYLD

Summary

JPMorgan Chase & Co. reported robust financial results for the third quarter of 2021, demonstrating strong profitability and a healthy balance sheet. Net income surged by 24% year-over-year to $11.7 billion, or $3.74 per diluted share, driven by a significant reduction in the provision for credit losses and a one-time tax benefit. Total net revenue saw a modest 1% increase to $29.6 billion, supported by strong performance in Investment Banking fees within the Corporate & Investment Bank (CIB) segment and higher asset management fees in Asset & Wealth Management (AWM). The firm continued to benefit from substantial deposit inflows, up 19% year-over-year, reflecting the ongoing impact of government actions related to the COVID-19 pandemic. Capital ratios remained strong, with a Common Equity Tier 1 (CET1) capital ratio of 12.9%, well above regulatory requirements. The firm also continued to return capital to shareholders through dividends and share repurchases, highlighting a focus on shareholder value while maintaining a strong financial position.

Financial Highlights

32 data points
Beta

Net Income

$11.69B

EPS (Diluted)

$3.74

Total Assets

$3.76T

Cash & Equivalents

$759.87B

Free Cash Flow

$23.33B

Financial Statements
Beta
Interest Expense$1.40B
Net Income$11.69B
EPS (Basic)$3.74
EPS (Diluted)$3.74
Shares Outstanding (Basic)3.00B
Shares Outstanding (Diluted)3.01B

Key Highlights

  • 1Net income increased by 24% year-over-year to $11.7 billion, or $3.74 per diluted share, on total net revenue of $29.6 billion.
  • 2Provision for credit losses was a net benefit of $1.5 billion, driven by a $2.1 billion reduction in the allowance for credit losses due to an improved macroeconomic outlook.
  • 3Investment Banking fees increased by 50% year-over-year, driven by higher advisory fees from increased M&A activity and higher equity underwriting fees from a strong IPO market.
  • 4Asset management, administration and commissions revenue increased by 18%, driven by higher fees in AWM due to net inflows and higher market levels.
  • 5Deposits grew 12% year-over-year to $2.4 trillion, reflecting significant inflows across all lines of business, largely driven by government actions in response to the COVID-19 pandemic.
  • 6CET1 capital ratio remained strong at 12.9%, indicating robust capital adequacy.
  • 7The firm returned $5.2 billion to shareholders through share repurchases and increased its quarterly common stock dividend by 11% to $1.00 per share.

Frequently Asked Questions

JPMorgan Chase reported a significant increase in profitability, with net income rising by 24% year-over-year to $11.7 billion for the third quarter of 2021. This improvement was driven by a substantial decrease in the provision for credit losses, which turned into a net benefit, and a one-time tax benefit related to finalizing the firm's 2020 U.S. federal tax return.

Total net revenue increased by 1% year-over-year to $29.6 billion. Growth was primarily driven by a 50% increase in investment banking fees, benefiting from strong M&A activity and a robust IPO market, and an 18% increase in asset management, administration, and commissions revenue, reflecting higher fees in AWM due to net inflows and improved market levels.

JPMorgan Chase saw an improvement in credit quality, reflected in a net benefit of $1.5 billion from the provision for credit losses. This was primarily due to a $2.1 billion reduction in the allowance for credit losses, attributed to an improved macroeconomic outlook. Net charge-offs also decreased significantly year-over-year.

The firm maintained a strong capital position with a CET1 capital ratio of 12.9%, well above regulatory minimums. JPMorgan Chase demonstrated its commitment to returning capital by increasing its quarterly common stock dividend by 11% to $1.00 per share and repurchasing $5.2 billion of common stock during the quarter.