JPMorgan Chase & Co. (JPM) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023.

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, ladies and gentlemen. Welcome to the JPMorgan Chase’s First Quarter 2023 Earnings Call. This call is being recorded. Your line will be muted for the duration of the call. We will now go live to the presentation. Please stand by.

At this time, I would like to turn the call over to JPMorgan Chase’s Chairman and CEO, Jamie Dimon; and Chief Financial Officer, Jeremy Barnum. Mr. Barnum, please go ahead.

Jeremy Barnum - CFO

Thanks, and good morning, everyone. The presentation is available on our website, and please refer to the disclaimer in the back.

Starting on page 1. The Firm reported net income of $12.6 billion, EPS of $4.10 on revenue of $39.3 billion and delivered an ROTCE of 23%. These results included $868 million of net investment securities losses in corporate.

Before reviewing our results for the quarter, let’s talk about the recent bank failures. Jamie has addressed a number of the important themes in his shareholder letter and the recent televised interview. So, I will go straight to the specific impacts on the Firm.

As you would expect, we saw significant new account opening activity and meaningful deposit and money market fund inflows, most significantly in the Commercial Bank, Business Banking and AWM. Regarding the deposit inflows, at the Firm-wide level, average deposits were down 3% quarter-on-quarter, while end-of-period deposits were up 2% quarter-on-quarter, implying an intra-quarter reversal of the recent outflow trend as a consequence of the March events. We estimate that we have retained approximately $50 billion of these deposit inflows at quarter-end.

It’s important to note that while the sequential period-end deposit increase is higher than we would have otherwise expected, our current full year NII outlook, which I will address at the end, still assumes modest deposit outflows from here. We expect these outflows to be driven by the same factors as last quarter as well as the expectation that we will not retain all of this quarter’s inflows.

Now back to the quarter touching on a few highlights. We grew our IB fee wallet share. Consumer spending remained solid with combined debit and credit card spend up 10% year-on-year. And credit continues to normalize, but actual performance remains strong across the Company.

On Page 2, we have some more detail. Revenue of $39.3 billion was up $7.7 billion or 25% year-on-year. NII ex markets was up $9.2 billion or 78%, driven by higher rates, partially offset by lower deposit balances. NIR ex markets was down $1.1 billion or 10% driven by the securities losses previously mentioned as well as lower IB fees and lower auto lease income on lower volume. And markets revenue was down $371 million or 4% year-on-year.