Chillin' out till it needs to be funded
It has been a landmark year for JP Morgan in that is has settled for more than $13.5 B with Department of Justice and Institutional investors like Blackrock and a $2.6 Bln in fines and penalties in another last minute settlement on the Madoff cases before Q4. The Bank did manage to eke out a comfortable $17.9 Bln in Profits for the year helped by a full year Corporate Investment Banking revenues just shy of $6 Bln. Net Revenues on managed basis even knock on the $100 B mark but the $100B figure still remains unachievable.
At the end of the fourth quarter, the bank has bought back and extinguished only 44.6 mln shares in the year while the Capital appreciation score is a humongous $14.51 or 33% on the 2012 closing of $43.97, adding $33 Bln in Market Cap to score just on par with a certain hygiene and consumer products company (US:PG ;). The bank cleared the 2013 stress tests by September in its second filing too but was mostly technical details of how he bank did not want to commit to market prices in stressed portfolios where the securities market is illiquid.
The Tier I common remains healthy at 10.7% but the Return on Assets under 1% does not bode well. It a poor 0.87% for the quarter and just 0.75% for the year as it also includes the Q3 write down of nearly $9 Bln. Even Return on RWA has whittled down from 2% in 2012 to 1.34% in 2013. Balance sheets Total Assets are $2.4 T and asel II Tier I common is 9.5% or $151 B
Legal expenses added in the quarter’s shennanigan management amount to $0.27 cents or $1.1 Bln post tax, the others coming from ready reserves augmented in Q3. The sale of One Manhattan Plaza and its holding of Visa (US:V) shares try to balance out the negative impact of the same but the $2 Bln DVA hit on accounting, keels it over to a net negative impact of $0.10 cents of the EPS which would otherwise have been above the $1.4 mark and par for the quarter
2013 expenses were on par with the 2012 $60 Bln figure adjusted for Legal expenses of $10 and $4 Bln(2012) Net EPS is however down a $1 from $5.2 to $4.35
The overall bank’s Q4 spreads on the NII component of $11 Bln were a poor 2.09% in Q4 but up 1 bp from Q3 Bank Headcounts are down 13060 from 2012 at 151,33. Net Branches gained by only 16 from Q1 to 5630 with 512 more ATMs despite the new Expansion in Jacksonville in play after a big West Coast pump in 2012 Chase counts 6 mln new digital customers across Online and Mobile.
The Bank is back to counting Mortgage Applications which have come down 51% on year and 23% on a weak Q3 as First time mortgages were few, keeping outstanding mortgages at $91 Bln across Real Estate and Home portfolios. HELOC balances have receded another $11 Bln at $78 Bln and Loan losses prvisions(allowances) have been halved at 2.2% allowing the RoE of 11% on the business. Mortgage Banking revenues have clicked up int he second quarter reported to $2.2 Bln including an even $1.1 Bln in Interest income. Fee income booked has halved
Card and Auto Revenues have dropped an imperceptible 3% to $4.7 Bln and the NCO rate under 3% meant a Net Income of $1.1 Bln in the business segment even as provisions reduced by $600 mln over the prior year in Cards alone with the Net Interest Income at $3.3Bln , profits up 20% in the segment despite a spread compression in Credit cards driving down the same by $222 mln over last year. ROE in the segment is 26%
Consumer Banking Revenues in Chase were $4.4 Bln with Income up 7% on year to $780 mln. Chase managed to increase Fee income 4% on debit card and investment sales traction. Non Interest expenses were higher by 3% at $3 Bln Mortgage Banking Net Income for the year is $3 Bln with Production Revenues of $3.5 Bln and Repurchase benefits however still score $335 mlnof the $825 mln profits in the Production streams. The Topline includes $909 mln froom related Net Interest and charges.
Full year revenues in Consumer Banking were $46 Bln with Non interest Expenses of $28 Bln and a Comp ratio of 25% with Non Interest Income of $17.5 Bln counting Deposit related income of $2.983 Bln and $5.8 Bln from Card & Auto and $5.1 Bln from Mortgages. Retained Loans averaged at $392 Bln, Deposits up to $ 464 Bln on average
Q4 CIB income was down three fifths or 60% at $858 mln as Revenues were down 21% OTC Derivatives were marked down $1.5 Bln On the revenue score excludin DVA impact company reported a 27% Comp ratio. FICC and Equities contributed $4.1 Bln Topline in Q4 Securities Services incl Custody accounted for $1 Bln.
Full year revenues in Corporate Investment Banking were $34 Bln with Non interest Expenses of $21.7 Bln
Commercial Banking revenues were up on 5% increase in NII in the quarter but Asset Management again jumped in Q4 by $400 mln with Prvate Banking revenue at $1.6 Bln up 11% on year
Full year revenues in Consumer Banking were $7 Bln with Non interest Expenses of $2.6 Bln
Full year revenues in Consumer Banking were $11.32 Bln with Non interest Expenses of $8 Bln and Corporate Expenses were another $10 Bln for the year
Th &A session is getting interesting so, I’ll get back to you later