JPMorgan Chase & Co., Q3 2020 Earnings Call, Oct 13, 2020 - NYSE:JPM

NYSE:JPM

Here is a detailed list of statements made by Jennifer A. Piepszak during the JPMorgan Chase & Co. earnings call on October 13, 2020:

1. Earnings Overview:

   • Reported net income of $9.4 billion, EPS of $2.92, and revenue of $29.9 billion with a return on tangible common equity of 19%.
   • Included $524 million of legal expenses related to the resolution of legal matters.
   • Underlying business fundamentals performed well despite uncertainty.

2. Highlights:

   • CIB (Corporate & Investment Bank) had strong performance with investment banking fees up 9% and markets revenue up 30% year-on-year.
   • Record revenue in Asset & Wealth Management (AWM), up 5% year-on-year.
   • Average deposits increased by 5% sequentially, with JPMorgan moving into the #1 spot in U.S. retail deposits with 9.8% market share.
   • Average loans were down 4% quarter-on-quarter due to revolver paydowns from Wholesale clients.

3. Detailed Results:

   • Revenue of $29.9 billion was flat year-on-year; net interest income down approximately $1.2 billion or 9% on lower rates.
   • Noninterest revenue was up $1.2 billion or 7%, driven by CIB.
   • Expenses of $16.9 billion were up approximately $500 million or 3% year-on-year due to higher legal expenses.
   • Credit costs were approximately $600 million, down $900 million year-on-year, primarily due to modest reserve releases.

4. Customer Assistance Programs:

   • Majority of Card & Auto customers exited relief; remaining deferrals are primarily in Home Lending.
   • Approximately 90% of accounts that exited relief remain current.

5. Balance Sheet and Capital:

   • Ended the quarter with a CET1 ratio of 13%, up 60 basis points from the previous quarter.
   • Over $1.3 trillion of liquidity sources available.

6. Consumer & Community Banking (CCB):

   • Reported net income of $3.9 billion and ROE of 29%.
   • Revenue of $12.8 billion was down 9% year-on-year due to deposit margin compression.
   • Deposit growth was 28% year-on-year, with client investment assets up 11%.
   • Digital adoption increased, with 69% of customers being digitally active.

7. Corporate & Investment Bank (CIB):

   • Reported net income of $4.3 billion and ROE of 21% on revenue of $11.5 billion.
   • Investment Banking revenue was up 12% year-on-year.
   • Markets revenue was $6.6 billion, up 30% year-on-year.

8. Commercial Banking:

   • Reported net income of $1.1 billion and ROE of 19%.
   • Revenue of $2.3 billion was flat year-on-year.
   • Average loans were up 5% year-on-year but down 7% quarter-on-quarter.

9. Asset & Wealth Management:

   • Reported net income of $877 million with a pretax margin of 31%.
   • Record revenue of $3.7 billion for the quarter, up 5% year-on-year.
   • Net long-term inflows of $34 billion were positive across all channels.

10. Corporate Segment:

    • Reported a net loss of approximately $700 million.
    • Revenue was a loss of $339 million, down $1 billion year-on-year.

11. Outlook:

    • Full-year outlook for 2020 remains in line with previous guidance.
    • Expect net interest income to be approximately $55 billion and adjusted expenses to be approximately $66 billion.

12. Q&A Responses:

    • Discussed the outlook for revenue growth in a low-rate environment and the importance of branch expansion.
    • Provided insights on reserve releases and the impact of economic conditions on charge-offs.
    • Addressed questions on credit quality, particularly regarding nonaccrual loans and commercial real estate.
    • Commented on the potential for industry consolidation in Asset & Wealth Management.
    • Discussed the impact of stimulus on credit losses and the outlook for delinquencies and charge-offs.

This summary captures the key points made by Jennifer A. Piepszak during the earnings call, reflecting her insights on the company's performance, outlook, and responses to analyst questions.