Chase Q12021 deposits soar by 32%, revenue ahead of forecasts

JPMorgan Chase Q12021 earnings, yet again, are ahead of analyst forecasts with revenue up by 14.3% y-o-y to $32.2bn.

For the three months to end March, Chase posts net income of $14.3bn, up 25.4% from $11.4bn in the year ago quarter. It all helps to drive the Chase share price to its highest ever level (see graph).

Over the last two years, Chase has beaten revenue estimates 88% of the time. Chase Q1 2021 reports credit costs net benefit of $4.2bn, including $5.2bn of net revenue releases and $1.1bn of net charge-offs. Average loans in the first quarter inch up by 1% but deposits soar by 32%.

Digital banking highlights include active mobile banking customers up by 9% y-o-y. Chase ends the first quarter with 41.9 million active mobile customers.

The bank’s retail focused Consumer & Community Banking unit posts strong metrics but it is the strength of the investment banking unit that will grab the headlines. On the consumer side, Chairman and CEO Jamie Dimon says that consumer spending has returned to pre-pandemic levels.

Specifically, home lending originations are very strong, up 40%. Notably, some 75% of consumer mortgage applications are now completed digitally.

Less positive metrics include muted loan demand with card outstanding balances down despite recovering to pre-Covid levels.

Deposits are up 32% and investments up by 44%.

JPMorgan Chase Q1 2021 less positive metrics

On the other hand, ongoing margin pressure takes its toll on the consumer bank net interest margin. This falls sharply from 2.05% in the year ago quarter to 1.29% this quarter.

In the Corporate & Investment Bank, JPMorgan reports global investment banking fees up 57%.

Commercial Banking generated investment banking revenue of over $1bn.

In Asset & Wealth Management, continued strong investment performance, growth in new products and adviser hiring led to net inflows of $48bn into long-term products.

Chase share price of $154: market cap of $467bn

Says Dimon: “We continue to make significant investment in products, people and technology. We are fully engaged in trying to help solve some of the world’s biggest issues. We announced a commitment to finance and facilitate $200bn in 2020 to drive action on climate change and advance sustainable development.”

For the year to date, the Chase share price is ahead by 22%. At $154, Chase share price represents its highest ever price at a market cap of$467bn.