JP Morgan Logs 13 Per Cent Rise In Private Banking Revenues

Tom Burroughes

12 April 2013

Revenue from JP Morgan's private banking arm rose 13 per cent in the first quarter of 2013 from a year ago, to stand at $1.4 billion, the Wall Street banking giant said today.

As US and other banks started to issue quarterly figures, JP Morgan said assets under supervision achieved a record level of $2.2 trillion, a rise of $158 billion, or up 8 per cent, from the prior year. Assets under management were a record $1.5 trillion, an increase of $101 billion, or up 7 per cent, due to net inflows to long-term products and the effect of higher market levels, partially offset by net outflows from liquidity products.

Custody, brokerage, administration and deposit balances were $688 billion, up $57 billion, or 9 per cent, due to the effect of higher market levels and custody and brokerage inflows, the bank said in a statement.

The bank’s Basel I Tier 1 common ratio was 10.2 per cent at March 31, including the impact of the Basel 2.5 rules that became effective on January 1 this year.

Across all divisions, the bank reported record net income of $6.5 billion for the first quarter of 2013, up from $4.9 billion a year earlier. Revenue for the quarter was $25.8 billion, down from $26.8 billion in the prior year.

As previously announced, JP Morgan said it intends to increase the second-quarter common stock dividend to $0.38 per share from the current $0.30 per share, returning the dividend to its highest level.

During Q1, the bank repurchased $2.6 billion of common equity. The Federal Reserve has asked JP Morgan to submit by the end of the third quarter an additional capital plan to address weaknesses it has identified in a recent stress test of major US banks.

“The firm is dramatically increasing the resources deployed and intends to fully address their requirements. Following their review, the Federal Reserve may require the firm to modify its capital distributions,” it said.

Jamie Dimon, chairman and chief executive, said: "We are seeing positive signs that the economy is healthy and getting stronger. Housing prices continued to improve and new home purchases are also starting to come back. We also saw strong performance in our credit card portfolio, with net charge-offs remaining near historic lows, another sign that consumers are healthier and more confident. As a result, we reduced the allowance for loan losses in consumer and community banking in the first quarter by a total of $1.2 billion and are likely to see further releases. Credit conditions were also favorable across the wholesale loan portfolios."