JP Morgan

  • Revenue of $29 billion was down 3% from Q1 2019. Net income was however down 69% to $2.9 billion as the bank increased its reserves by $6.8 billion in anticipation of credit losses as result of expected deep recession and low oil prices.

  • As a consequence of the sharp decline in net income, return on equity (ROE) declined sharply to just 4% well below the long term average of in excess of 10%.

  • JPMorgan however said that it still intend to pay a 90 cent dividend, "pending board approval". The bank has however suspended its share repurchase program.

  • Loans grew by 6% year over year throughout JPMorgan Chase's business.

  • Divisional summary. In the consumer banking business, deposits grew 10% from a year ago, client investment assets grew 3%, and credit card sales volumes was 4% higher. Credit card sales volumes dropped significantly in March. By contrast revenue from the bank's markets and securities service soared by 32% to $7.2 billion on the back of increased market volatility.

  • The bank's book value of $75.88 per share is 6% higher than a year ago.

  • JPMorgan is a high-quality business which consistently generates ROE in excess of 15% while at the same time perhaps the most conservatively managed as highlighted by the loan to deposit ratio below. As a result it is perhaps the best placed US bank to deal with the current crisis and resume growth when conditions normalize. Trading at 1.2x book value and PE of 9.9x JPMorgan is not excessively valued and should deliver sound returns for long term investors.

JP Morgan