The Banking and Strategy Initiative

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Bank Earnings Season 3Q 2014: JP Morgan pushes the $25 Bln mark on time

Minus Jamie Dimon, who has already announced that he is undergoing therapy for Throat Cancer and otherwise keeping a lower profile in the company, the firm, which has recently weathered a hacker run on 76 million accounts and subtracted another 32 cents from this quarter’s earnings to pay DOJ fines managed a $100 Bln run rate in the third quarter even as FICC trading came back out of the hole with  a small growth, as yields get ready to go below 2% on the 10 year bond. The firm seems to have also dispensed with lengthy releases and conference artifacts altogether as the Conference is pushed up to 8:30 am from where we will write this quarter’s report.

After the extraordinary expenses hit, the bank managed a $1.36 for the quarter, but revenues having dipped in the second, the overall report card for 2014, much better than the year gone by would still not reach its optimum as Dimon completes 10 years at the helm since Bankone became a part of the group in July 2004. JP Morgan then went on to amalgamate the combined ship as JP Morgan Chase under Dimon as CEO of JP Morgan Chase and he was appointed chairman there on New Year’s eve in 2006. Earlier this year Chase again separated its Retail bank CEO post a year after the whale trader wounds spoiled the stream for JP Morgan with the mainstream media running out of intelligent analysis and who to blame for the crisis going away. The Bank also signed a $17 Bln settlement with USAG earlier this year and continues to stay away from FHA mortgages even as The Mortgage Servicing business restarted in the first quarter this year with a gaga and a sputter, again to report losses in 2Q 2014.

The Bank’s repurchase program netted another $1.5 bln equity in Buybacks, core loans growing correspondingly on the assets and the Basel III ratios staying at 10.2% (Core Tier 1)  The bank scored on the LCR compliance improving after the final regulations were published this quarter to 5.7%

CIB 3q

The CIB business counted a topline of $8.8 Bln with IB fees totting up the expected $1.5 bln and Treasury services in CIB keeping pace at $1 Bln. Dealogic scored them high on ECM improving their performance on quarter and IPOs where they continue to lead globally

Equities totted up the expected 33% of Fixed Income business and Securities Services were back in the mix up 8% but the taid $1.1 Bln to CIB income

The CIB business egment took the legal expense hit in the quarter adding a $1 bln in expenses here.

Consumer 3q

Consumer Banking profits grew as the bank continued to eke out better share scores in the mortgage origination market, profits up 20% for the year and Deposit costs were finally down, margins scored at 2.20%

Mortgage Originations on a very low base in June jumped 26% only to be nearly half of the September 2013 performance. Servicing business expenses were down 33% on the year with headcounts down by 6000 on year

Auto and Card loans credit costs jumped as the bank ran out of LLRs but charge offs were competitively lower, Auto loan originations finally tapering off down 4% on June quarter

firm 3q

Lower loan yields continued to push down Net Interest Margins to 2.19%

Dimon spoke last week at the IIF meet in Washington and the Bank will be presenting its strategy again on November 12 with Doug Petno from CB (counting his cross revenues of $1.2 Bln in CIB) will present at the New York conference (BofA ML)

FX and LIBOR related settlements are moving on the bank’s calendar with the quarter’s CIB hit counting towards the reserves for the FX settlement eventually.


This entry was posted on October 14, 2014 by in Uncategorized.


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