J.P. Morgan wealth revenue grows in Q2 after solid recruiting

J.P. Morgan adds hundreds of advisors as Dimon pep talks economy

July 14, 2022 5:07 PM

Recruiting at J.P. Morgan Chase’s wealth management arms showed no signs of slowing despite rampant inflation and fears of a recession — which the megabank’s CEO says hasn’t come to fruition.

J.P. Morgan Wealth Management and the megabank’s Global Private Bank added a combined 750 financial advisors year over year to reach a combined 7,756 across the two units in the second quarter, according to the firm’s second-quarter earnings, which it disclosed on July 14. In a call with analysts, J.P. Morgan CEO Jamie Dimon offered a slightly different assessment than he did last month when he warned of “a hurricane” looming in the economy and advised investors to “brace yourself.” With rival Morgan Stanley reporting its earnings the same day, Dimon joined the other megabank’s CEO in arguing that the country is prepared for a downturn.

Consumers are spending 10% more than last year and around 30% more than they did before the pandemic, Dimon said.

“They have more income. Jobs are plentiful,” he said, according to a transcript by The Motley Fool. “Businesses, [if] you talk to them, they're in good shape. They're doing fine. We've never seen business credit be better ever like in our lifetimes. And that's the current environment. The future environment, which is not that far off, involves rates going up, maybe more than people think because of inflation. There might be a soft landing.”

In terms of its wealth management arms, the firm’s recruiting brought it to a softer landing for the quarter even as lower stock values reduced earnings across the board. For coverage of the firm’s first-quarter earnings, click here. For a look at the results from the fourth quarter and the full previous year, follow this link. To see the main takeaways from J.P. Morgan’s first-quarter earnings, scroll down our slideshow.

Wealth management

How private banks are courting the next generation of wealthy investors

October 18, 2021 10:30 AM

Note: The firm doesn’t break out specific wealth management metrics across its organization, which includes the Global Private Bank in its Asset & Wealth Management division and J.P. Morgan Wealth Management in the Consumer & Community Banking segment.

Wealth management revenue and earnings

For the Consumer & Business Banking unit, net revenue surged 9% year over year to $6.56 billion due primarily to growth in deposits, according to the firm. Across the entire unit, which includes home and auto lending and credit cards, net revenue ticked down 1% to $12.61 billion. The firm’s release of a credit reserve that it recorded last year drove down the segment’s combined net income by 45% from the year-ago period to $3.1 billion. Higher expenses also slashed earnings after the company made larger investments in the business in the form of compensation, technology and marketing.

Private bank revenue and earnings

The Global Private Bank boosted its revenue in the second quarter, even as the larger segment it’s part of sustained a giant hit to its earnings. The private bank’s revenue climbed 16% to $2.17 billion. For the whole Asset & Wealth Management division, revenue rose 5% to $4.31 billion. Higher deposits and loans driving up balances and margins pushed up the overall figure, even though lower performance fees and investment valuations offset some of the gains. Expenses from compensation, distribution fees and volume-related costs cut into the unit’s earnings. Its profit tumbled by exactly the same percentage that the expenses increased, 13%, to $1 billion.

Remark

Dimon clarified that he does believe the economy will go through “a storm” of some kind, though it’s not yet clear whether that will resemble a brief downpour or a tempest. The “terrible humanitarian crisis in Ukraine” and other factors such as how much interest rates rise and whether inflation and volatility slow down, will determine that, he said. “It's not going to change how we run the company. The economy will be bigger in 10 years. We're going to run the company. We're going to serve more clients. We're going to open our branch. We're going to invest in things, and we'll manage through that,” Dimon said. “In fact, going through a storm, that gives us opportunities, too. So I always remind myself the economy will be a lot bigger in 10 years. We're here to serve clients through thick or thin, and we will do that.”

J.P. Morgan adds hundreds of advisors as Dimon pep talks economy

Wealth management advisors and client assets

Private bank advisors and clients assets

Wealth management revenue and earnings

Private bank revenue and earnings

Remark