10-QPeriod: Q2 FY2022

JPMORGAN CHASE & CO Quarterly Report for Q2 Ended Jun 30, 2022

Filed August 3, 2022For Securities:JPMJPM-PCJPM-PDJPM-PKJPM-PLJPM-PMJPM-PJAMJBVYLD

Summary

JPMorgan Chase & Co. reported solid results for the second quarter and first half of 2022, demonstrating resilience amidst a challenging economic environment. Total net revenue saw a modest increase of 1% year-over-year for the quarter, primarily driven by a significant 19% rise in net interest income, reflecting higher interest rates and balance sheet growth. However, noninterest revenue declined by 12% due to lower investment banking fees and impacts from equity investment markdowns, partially offset by stronger CIB Markets revenue. Net income decreased by 28% year-over-year for the quarter, and 35% for the first half, largely attributable to a significant increase in the provision for credit losses. This provision was driven by loan growth and a modest deterioration in the macroeconomic forecast, contrasting with a net benefit in the prior year. Despite these headwinds, the firm maintained strong capital ratios, with a Common Equity Tier 1 (CET1) ratio of 12.2% under the standardized approach, and effectively managed its liquidity. Key business segments like Consumer & Community Banking and Commercial Banking demonstrated robust performance in deposits and loans, respectively, while the Corporate & Investment Bank showed strength in its Markets business despite a decline in Investment Banking fees.

Financial Highlights

33 data points
Beta

Net Income

$8.65B

EPS (Diluted)

$2.76

Total Assets

$3.84T

Cash & Equivalents

$669.26B

Free Cash Flow

$66.02B

Financial Statements
Beta
Interest Expense$3.52B
Net Income$8.65B
EPS (Basic)$2.77
EPS (Diluted)$2.76
Shares Outstanding (Basic)2.96B
Shares Outstanding (Diluted)2.97B

Key Highlights

  • 1Total net revenue for Q2 2022 increased by 1% year-over-year to $30.7 billion, driven by a 19% increase in net interest income to $15.1 billion, reflecting higher interest rates.
  • 2Noninterest revenue decreased by 12% year-over-year to $15.6 billion, primarily due to lower investment banking fees and equity investment losses.
  • 3Net income for Q2 2022 was $8.6 billion, a 28% decrease year-over-year, impacted by a higher provision for credit losses.
  • 4Provision for credit losses was $1.1 billion in Q2 2022, compared to a net benefit of $2.3 billion in Q2 2021, reflecting loan growth and a less favorable economic outlook.
  • 5The firm maintained a strong Common Equity Tier 1 (CET1) capital ratio of 12.2% (Standardized Approach) as of June 30, 2022.
  • 6Consumer & Community Banking (CCB) reported a 1% decrease in total net revenue to $12.6 billion, with net interest income up 8%, while card income decreased 45%.
  • 7Corporate & Investment Bank (CIB) saw total net revenue decrease by 10% to $11.9 billion, with Markets revenue up 15% driven by strong performance in Fixed Income and Equity Markets.

Frequently Asked Questions

JPMorgan Chase's net income decreased by 28% year-over-year in Q2 2022 to $8.6 billion. This decline was primarily driven by an increase in the provision for credit losses to $1.1 billion, compared to a net benefit of $2.3 billion in the prior year's quarter. Loan growth and a slightly weaker macroeconomic forecast contributed to the higher provision for credit losses.

Net interest income increased significantly by 19% year-over-year to $15.1 billion in Q2 2022. This growth was attributed to higher interest rates and balance sheet growth, demonstrating a positive impact from the rising rate environment.

The Consumer & Community Banking (CCB) segment's net revenue slightly decreased by 1% to $12.6 billion, with net interest income growing while card income declined. The Corporate & Investment Bank (CIB) segment experienced a 10% drop in net revenue to $11.9 billion, mainly due to lower investment banking fees, although its Markets business showed a 15% increase in revenue. Commercial Banking and Asset & Wealth Management saw modest revenue increases of 8% and 5% respectively.

JPMorgan Chase maintained a strong capital position. As of June 30, 2022, the Common Equity Tier 1 (CET1) capital ratio was 12.2% under the standardized approach, and 12.9% under the advanced approach. The firm also reported a Tier 1 capital ratio of 14.1% (Standardized) and a Supplementary Leverage Ratio (SLR) of 5.3%.