JPMorgan Chase reports 13% Y/Y drop in Markets & Securities Services revenue in Q4 2021
JPMorgan Chase & Co. (NYSE:JPM) has just posted its financial results for the fourth quarter of 2021, with Markets & Securities Services revenue down from the year-ago quarter.
The Corporate & Investment Bank (CIB) business delivered net income of $4.8 billion for the final quarter of 2021, down 9% from the year-ago quarter. CIB net revenue was $11.5 billion, up 2% in annual terms.
Banking revenue was $5.3 billion, up 28%. Investment Banking revenue was $3.2 billion, up 28%, driven by higher Investment Banking fees, up 37%, predominantly driven by higher advisory fees.
Payments revenue was $1.8 billion, up 26%, and included net gains on equity investments.
Excluding these net gains, revenue was up 7%, predominantly driven by higher fees and deposits, largely offset by deposit margin compression. Lending revenue was $263 million, up 36%, predominantly driven by lower mark-to-market losses on hedges of accrual loans compared to the prior year.
Markets & Securities Services revenue was $6.3 billion, down 13% from the year-ago quarter. The result was also lower than the $7.5 billion in revenue registered in the third quarter of 2021.
Markets revenue was $5.3 billion, down 11%. Fixed Income Markets revenue was $3.3 billion, down 16%, driven by a challenging trading environment in Rates, as well as lower revenues in Credit and Currencies & Emerging Markets compared to a strong prior year. Equity Markets revenue was $2.0 billion, down 2%, driven by lower revenue in derivatives, largely offset by higher revenue in Prime.
Securities Services revenue was $1.1 billion, relatively flat to the prior year.
Across all segments, reported revenue amounted to $29.3 billion, whereas managed revenue of amounted to $30.3 billion in the final quarter of 2021.
Credit costs net benefit was $1.3 billion including a $1.8 billion net reserve release and $550 million of net charge-offs.
Net income was $10.4 billion, down 14%, due to higher noninterest expense.
Jamie Dimon, Chairman and CEO, commented on the financial results:
“JPMorgan Chase reported solid results across our businesses benefiting from elevated capital markets activity and a pick up in lending activity as firmwide average loans were up 6%. The economy continues to do quite well despite headwinds related to the Omicron variant, inflation and supply chain bottlenecks. Credit continues to be healthy with exceptionally low net charge-offs, and we remain optimistic on U.S. economic growth as business sentiment is upbeat and consumers are benefiting from job and wage growth.”