JPMorgan asset and wealth management (AWM) unit has reported a drop in net income in Q4 2020 though revenues at the unit saw a rise.
Meanwhile, the group has reported a 42% growth in Q4 2020 profit, exceeding forecast, as it released money earlier put aside for bad loans.
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Key metrics
Net income at the AWM unit was $786m in the October-December quarter, down 2% from $801m in the prior year.
Revenue of $3.87bn was 10% higher than the previous year, with Asset Management contributing $2.21bn and Wealth Management contributing $1.66bn.
Higher legal expense as well as volume- and revenue-related expense resulted in a 13% rise in expense to $2.8bn.
AUM increased 17% to $2.7trn and client assets increased 18% to $3.7trn, aided by inflows into liquidity and long-term products.
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By GlobalDataThe quarter saw net inflows of $33bn into long-term products and outflows of $36bn from liquidity products.
Group performance
At a group level, net income increased to $12.13bn from $8.52bn as the bank released $2.9bn set aside as loan loss reserves.
The banking group’s revenue increased 3% year-on-year to $29.22bn.
JPMorgan chairman and CEO said: “While we reported record profits of $12.1 billion, we do not consider the reserve takedown of $2.9 billion to represent core or recurring profits – essentially reserve calculations, while done extremely diligently and carefully, now involve multiple, multi-year hypothetical probability-adjusted scenarios, which may or may not occur and which can be expected to introduce quarterly volatility in our reserves.
“While positive vaccine and stimulus developments contributed to these reserve releases this quarter, our credit reserves of over $30 billion continue to reflect significant near-term economic uncertainty and will allow us to withstand an economic environment far worse than the current base forecasts by most economists.”
Recently, a report said that JPMorgan is in initial discussions with China Merchants Bank to set up a Chinese joint venture in the wealth management space.
