The asset and wealth management (AWM) arm of JPMorgan has recorded a 20% decline in net income for the first quarter of 2022.
For the three months to 31 March 2021, the unit’s net income was $1bn as against $1.26bn in the year ago period.
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The business reported net revenue of $4.3bn, which represents an increase of 6% compared to last year.
The banking giant attributed the improvement in revenue to growth in deposits and loans, as well as higher management and performance fees.
However, the increase was partially offset by ‘deposit margin compression and the absence of net valuation gains recorded in the prior year,’ JPMorgan said in its press statement.
During the quarter, the unit’s assets under management (AuM) rose 4% to $3trn, on the back of cumulative net inflows and higher market levels.
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By GlobalDataNoninterest expense was $2.9bn for the first quarter of 2022, a surge of 11% year-on-year. The bank attributed the rise to higher performance-related compensation and distribution fees, higher structural expense, as well as higher investments in the business.
JPMorgan Chase chairman and CEO Jamie Dimon said: “Asset & Wealth Management delivered strong results as we saw positive inflows into long-term products of $19bn across all channels, as well as continued strong loan growth, up 14%, primarily driven by securities-based lending.”
Group performance
At a group level, JPMorgan Chase & Co reported a net income of $8.3bn, down 42% from $14.3bn a year earlier.
The slump was driven by a net credit reserve build of $902m as against a net credit reserve release of $5.2bn last year, the lender said.
Net revenue fell 5% to $31.6bn, while net interest income rose 7% to $14bn.
Commenting on the group performance, Dimon said: “JPMorgan Chase generated a healthy $30bn of revenue, $8.3bn of earnings and an ROTCE of 16% in the first quarter after adding $902 million in credit reserves largely due to higher probabilities of downside risks. Lending strength continued with average firmwide loans up 5% while credit losses are still at historically low levels.
“We remain optimistic on the economy, at least for the short term – consumer and business balance sheets as well as consumer spending remain at healthy levels – but see significant geopolitical and economic challenges ahead due to high inflation, supply chain issues and the war in Ukraine.”
