JPMorgan Chase has beaten analyst forecasts and
posted its highest ever quarterly net profit.

In the three months to 31 March, JPMorgan Chase
recorded net income of $5.6bn, up almost 70% from the corresponding
period a year ago.

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But the Retail Financial Services unit reported
a net loss of $208m, an increase of more than 50% from the net loss
of $131m posted in the prior year.

RFS net revenue fell by 19% to $6.3bn; net
interest income declined by 8% to $4.6bn reflecting the impact of
lower loan balances due to portfolio runoff and narrower loan
spreads.

Non-interest revenue collapsed by 40% to $1.6bn,
driven by lower mortgage fees and related income.

The Chase branded Retail Banking unit reported
net income of $891m, flat compared with the prior year.

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Retail Banking net charge-offs were $119m (2.86%
net charge-off rate), compared with $191m (4.58% net charge-off
rate) in the prior year.

Non-interest expense was $2.8bn, up 9% from the
prior year, resulting from sales force increases and new branch
builds.

Chase ended the first quarter with 5,292
branches, up 3% from a year ago.

Positive retail banking metrics included:

  • Checking accounts totaled 26.6m, up 3% from the
    prior year;
  • Average total deposits were $348.1bn, up 4%
    from the prior year and 3% from the prior quarter, and
  • Branch sales of investment products increased
    11% from the prior year and 8% from the prior quarter.

Less positive retail metrics included further
margin pressure: the deposit margin was 2.92% compared with 3.02%
in the prior year and 3.00% in the prior quarter.

Branch sales of credit cards were down 12% from
the prior year and down 9% from the prior quarter.

JPMorgan Chase’s Mortgage Banking, Auto &
Other Consumer Lending unit, also endured a challenging quarter. It
reported a net loss of $937m compared with net income of $257m a
year ago.

By contrast, Chase’s card unit returned to
profit, posting net income of $1.3bn, compared with a net loss of
$303m in the prior year. The improved results were driven by a
lower provision for credit losses, partially offset by lower net
revenue.