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October 17, 2022

JPMorgan Chase reports 17% fall in net income during Q3 2022

US financial services firm JPMorgan Chase has announced that its net income during the third quarter of 2022 fell 17% to $9.7bn.

The groupwide fall was driven by a net credit reserve build of $808m compared with a net reserve release of $2.1bn in the prior year, the bank said.

During the period under review, losses from net investment securities were $959m, which led to a $729m fall (after tax) in net income.

Net revenue at the Wall Street firm was up by 10% at $33.5bn during the latest quarter.

JPMorgan Chase reported a 34% increase in net interest income (NII) to $17.6bn. Driven by the rising rates, NII excluding markets soared 51% to $16.9bn.

Meanwhile, noninterest revenue fell 8% to $15.9bn due to lower investment banking fees.

The corporate and investment banking unit reported a 37% slump in net income of $3.5bn, whereas a net revenue fell by 4% to $11.9bn.

Net income at the asset and wealth management unit was reported to be $1.2bn, up 2% and the net revenue was $4.5bn, up 6%

This was primarily due to deposits and loans on higher margins and balances, offset by lower management fees due to unfavourable markets.

Assets under management plummeted 13% to $2.6 trillion due to market levels and net outflows from liquidity products.

Net losses at the corporate unit reduced to $294m in comparison with $916m during the year-ago period.

Commenting on the financial results, JPMorgan Chase chairman, CEO Jamie Dimon said: “JPMorgan Chase delivered solid performance across our businesses as we generated $9.7bn in net income, $32.7bn in revenue, an ROTCE of 18% and a CET1 capital ratio of 12.5%.

“While we unfortunately still do not know the ultimate effect of changes in capital requirements due to the completion of Basel III, through our earnings power and demonstrated ability to manage down risk-weighted assets, we expect to reach our current target CET1 ratio of 13%, which includes a 50 basis point buffer, in the first quarter of 2023.

“Importantly, we continue to make all the investments that we need to grow our businesses and serve our customers, and we hope to be able to resume stock buybacks early next year.”

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