JPMorgan Chase & Co (NYSE:JPM) Q1 2019 Earnings Conference Call - Final Transcript

Apr 12, 2019 • 08:30 am ET

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JPMorgan Chase & Co (NYSE:JPM) Q1 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, ladies and gentlemen. Welcome to JPMorgan Chase's First Quarter 2019 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, Marianne Lake. Ms. Lake, please go ahead.

Executive
Marianne Lake

Thank you, operator. Good morning, everybody. I'm going to take you through the earnings presentation, which is available on our website.

Please refer to the disclaimer at the back of the presentation.

Starting on Page 1, the firm reported record net income of $9.2 billion, and EPS of $2.65 on record revenue of nearly $30 billion, with a return on tangible common equity of 19%. The results this quarter were strong and broad-based. Highlights include core loan growth ex-CIB of 5%, with loan trends continuing to progress as expected.

Credit performance remained strong across businesses. We saw record client investment assets in Consumer of over $300 billion and record new money flows this quarter, and double-digit growth in both Card sales an Merchant processing volumes, up 10% and 13% respectively.

We ranked number one in Global IB fees and gained meaningful share, with share well above 9% this quarter.

In the Commercial Bank, we had record gross IB revenue. In Asset & Wealth Management, record AUM and client assets, and the firm

delivered another quarter of strong positive operating leverage.

Turning to Page 2 and talking into more detail about the first quarter. Revenue of $29.9 billion was up $1.3 billion or 5% year-on-year, driven

by net interest income which was up $1.1 billion or 8% on higher rates as well as balance sheet growth and mix.

Non-interest revenue was up slightly as reported. But excluding fair value gains on the implementation of a new accounting standard last year,

NIR would've been up 5%, reflecting Auto lease growth and strong Investment Banking fees, and while Markets revenue was lower, there

were other items more than offsetting.

Expense of $16.4 billion was up 2% relating to continued investments we're making in technology, real estate, marketing and front office,

partially offset by a reduction in FDIC charges of a little over $200 million.

Credit remains favorable across both Consumer and Wholesale. Credit costs of $1.5 billion were up $330 million year-on-year, driven by

changes in Wholesale reserves. In Consumer, charge-offs were in line with expectations and there were no changes to reserve this quarter.

In Wholesale, we had about $180 million of credit costs, driven by reserve builds on select C&I client downgrades. And recall that there was a

net release last year related to energy. Once again, these downgrades were idiosyncratic. It was a handful of names and across sectors. Net

reserve builds to this order of magnitude are extremely modest given the size of our portfolio, and we are not seeing signs of deterioration.

Moving on to Page 3 and