JP Morgan's revenues in the second quarter of 2016 stood up at US$24.4bn with corporate and investment banking (CIB) revenue, the division housing the bank's structured products business, also up 23% to US$595m, the bank said in its Q2 2016 results.
According to the report, corporate and investment banking's (CIB) net income was US$2.5bn, an increase of 6% while net revenue saw an increase of 5% to US$9.2bn. Banking revenue was US$2.7bn, down 10%, while investment banking revenue was US$1.5bn, down 15%, 'largely driven by lower equity underwriting fees on lower industry issuance', according to the bank.
Treasury Services revenue was US$892m, down 1% with lending revenue also down by 8% to US$277m, 'reflecting mark-to-market losses on hedges of accrual loans'. JP Morgan's markets & investor services revenue was US$6.5bn, up 13%, while fixed income markets revenue was up 35%, on the back of 'strong performance in rates and currencies & emerging markets on higher client flows as well as improved performance in credit and securitized products driven by better market conditions'. The US bank also reported that equity markets revenue was up 2% while securities services revenue was down 9% to US$907m.
JP Morgan remains one of the most active issuer of structured products globally including tranche and flow products with a 2% market share and over US$3.5bn sold across jurisdictions year to date (YTD) despite dropping to the 10th spot in the top 10 global market shares ranking. JP Morgan also remains a top provider in the North America region with a 14% market share across US$2.9bn in sales YTD. SRP data also shows that JP Morgan Chase launched 1,041 structured notes worth US$3.3bn in the US retail market in Q2 2016 and is also the derivatives provider of a product being sold in Japan (Vision, NTT M2018) by Chugin Securities.
JP Morgan Chase's net revenue was US$25.2bn, up 3% with net interest income also up 6% to US$11.7bn, 'primarily driven by loan growth and the impact of higher rates, partially offset by lower investment securities balances'. Non-interest revenue of US$13.6 billion was flat, with the increase in CIB markets revenue largely offset by lower revenue in asset management, and lower CIB investment banking revenue.
The bank also reported that consumer & business banking net revenue was US$4.6bn, up 3%, reflecting strong deposit and account growth, largely offset by spread compression. Mortgage banking net revenue was US$1.9bn, up 5%, driven by portfolio growth and higher production revenue, largely offset by lower servicing revenue. JP Morgan's commercial banking net income was US$696m, up 33%, with net revenue standing at US$1.8bn, up 4%, reflecting higher net interest income from higher average loan balances and deposit spreads. The bank's non-interest expense was US$731m, up 4%, due to continued investments in technology and increased hiring of bankers.
"Overall, our performance reflected the strength of our balance sheet and our ability to invest in the future of our company," said Jamie Dimon (pictured), Chairman and CEO, in a statement. "Throughout the recent uncertainty and turbulence in the markets, we continued to be there for our clients - solid and steadfast to meet their needs, execute their transactions and provide liquidity."
Click in the link to read the Q2 2016 results for JP Morgan.
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