Key Metrics
Consolidated Metrics
- Net Interest Income (NII): $23,405 million (3% yoy)
- Noninterest Income (NIR): $19,249 million (12% yoy)
- Provision for Credit Losses: $3,111 million
- Noninterest Expense: $22,565 million (4% yoy)
- Net Charge-Offs: $2,087 million (up $590 million yoy)
- Ending Loans: $1,340,011 million
- Ending Deposits: $2,430,772 million
- Nonperforming Assets: $8,628 million
- Book Value: $115.15 per share
- Tangible Book Value: $96.42 per share
Investment Banking/Market Results
- Investment Bank Fees: $2,267 million (31% yoy)
- Advisory Fees: $847 million (10% yoy)
- Equity Underwriting Fees: $344 million (26% yoy)
- Debt Underwriting Fees: $1,076 million (56% yoy)
- Equities Revenue: $2,622 million (27% yoy)
- FICC Revenue: $4,120 million (flat)
- Securities Services Revenue: $1,3 billion (9% yoy)
Forward guidance
- 2024 NII Guidance: Expected to be approximately $92.5 billion; NII ex-markets to be approximately $91.5 billion.
- Adjusted Expense Guidance: Expected to be about $91.5 billion for 2024.
- Q4 NII Guidance: Implied NII for Q4 includes about $800 million of markets NII.
- Card Net Charge-Off Rate: Expected to be approximately 3.4% for 2024.
- 2025 NII Ex-Markets Consensus: Currently at $87 billion, with expectations for a trough in mid-2025.
- Deposit Behavior: Anticipate deposits to be relatively flat for the remainder of 2024, with potential growth in 2025 as normalization occurs.
- Expense Growth: Expecting a healthy step-up in expenses due to inflation and growth strategies, with a core expense base projected just below $90 billion.
Key takeaways
- Positives:
- Jamie Dimon emphasized the firm's commitment to growth, stating, "Our goal is to gain share, and everything we do, we get really good returns on it," indicating confidence in strategic investments despite current economic pressures.
- The Commercial and Investment Bank (CIB) reported a 31% year-on-year increase in investment banking fees, reflecting strong market conditions and a robust pipeline, which Dimon noted as "optimistic about our pipeline."
- Asset and Wealth Management (AWM) achieved record revenues and long-term inflows, with Dimon highlighting, "We think there are huge opportunities in the innovation economy," suggesting a positive outlook for this segment.
- The firm’s CET1 ratio remained strong at 15.3%, providing a solid capital base for future growth and stability.
- Negatives:
- Deposit margins are under pressure, with Barnum noting, "We are seeing a slowdown in customer yield-seeking activity," which could impact net interest income (NII) moving forward.
- The expectation of a 6% sequential decline in NII ex-markets for Q4 2024 was highlighted, with Barnum stating, "The biggest single driver is in fact the yield curve," indicating potential challenges ahead.
- Credit costs increased to $3.1 billion, with net charge-offs up significantly, particularly in card services, which Barnum attributed to "higher revolving balances."
- Dimon expressed caution regarding market valuations, stating, "I think things... could be quite turbulent," indicating a potential risk to future growth and investment opportunities.
Peer Summary
- Net Interest Income (NII) Trends: Bank of America anticipates NII growth to $14.3 billion in Q4, while Wells Fargo expects a 9% decline in full-year NII, indicating diverging trends in interest income across competitors.
- Consumer Behavior: Bank of America reported a 4-5% increase in consumer payments, contrasting with Citigroup's observation of lower discretionary spending impacting retail services, suggesting varied consumer sentiment.
- Loan Demand: Wells Fargo noted weak commercial loan demand due to economic uncertainty, while Morgan Stanley expects a reacceleration in loan growth, highlighting differing market conditions.
- Fee-Based Revenue Growth: Goldman Sachs reported a double-digit increase in fee-based revenues, while Wells Fargo's fee-based revenue grew 16%, indicating a competitive focus on diversifying revenue streams.
- Regulatory Pressures: Goldman Sachs and Citigroup both expressed concerns about regulatory changes impacting capital requirements, which could affect operational flexibility and profitability across the sector.
