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01/14 09:01
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary presents a mixed picture. Financial performance and market strategy are stable, but concerns about the labor market, credit cycle risks, and unclear management responses regarding NBFI exposure dampen sentiment. While the company maintains a strong financial position and positive consumer activity, uncertainties around regulatory changes and economic conditions persist. The lack of guidance on shareholder returns and potential risks in NBFI lending further contribute to a neutral outlook.
Net Income $14.4 billion, EPS of $5.07, ROTCE of 20%. Reasons: Higher markets revenue and higher fees across asset management, investment banking, and payments.
Revenue $47.1 billion, up 9% year-on-year. Reasons: Predominantly driven by higher markets revenue and higher fees across asset management, investment banking, and payments.
Expenses $24.3 billion, up 8% year-on-year. Reasons: Higher volume and revenue-related expenses.
Credit Costs $3.4 billion, with net charge-offs of $2.6 billion and a net reserve build of $810 million. Reasons: Slightly elevated charge-offs due to instances of fraud in certain secured lending facilities.
CET1 Ratio 14.8%, down 30 basis points versus the prior quarter. Reasons: Higher RWA driven by increases in wholesale lending across Banking and Markets and other market activities.
CCB Net Income $5 billion. Revenue of $19.5 billion, up 9% year-on-year. Reasons: Higher NII incurred on higher revolving balances.
CIB Net Income $6.9 billion. Revenue of $19.9 billion, up 17% year-on-year. Reasons: Higher revenues across markets, payments, investment banking, and security services.
IB Fees Up 16% year-on-year. Reasons: Pickup in activity across products, particularly equity underwriting due to an active IPO market.
Markets Revenue (Fixed Income) Up 21% year-on-year. Reasons: Higher revenues in rates and credit, strong performance in securitized products.
Markets Revenue (Equities) Up 33% year-on-year. Reasons: Robust client activity across the franchise, notable outperformance in prime.
AWM Net Income $1.7 billion, with a pretax margin of 36%. Revenue of $6.1 billion, up 12% year-on-year. Reasons: Growth in management fees due to strong net inflows, higher average market levels, and higher brokerage activity.
AUM $4.6 trillion, up 18% year-on-year. Reasons: Continued net inflows and higher market levels.
Client Assets $6.8 trillion, up 20% year-on-year. Reasons: Continued net inflows and higher market levels.
Corporate Net Income $825 million. Revenue of $1.7 billion. Reasons: Not specified.
Sapphire portfolio refresh: This has been the best year ever for new account acquisitions for the Sapphire portfolio.
Retail deposit share: Retained #1 position in retail deposit share for the fifth consecutive year in a relatively flat deposit market.
Investment banking fees: IB fees were up 16% year-on-year, reflecting a pickup in activity across products, particularly in equity underwriting due to an active IPO market.
Markets revenue: Fixed income was up 21% year-on-year, and equities were up 33% due to robust client activity and notable outperformance in prime.
Net income and revenue: Firm reported net income of $14.4 billion and revenue of $47.1 billion, up 9% year-on-year, driven by higher markets revenue and fees across asset management, investment banking, and payments.
Asset & Wealth Management: Record revenue of $6.1 billion, up 12% year-on-year, driven by growth in management fees, strong net inflows, and higher brokerage activity. AUM of $4.6 trillion and client assets of $6.8 trillion were up 18% and 20% year-on-year, respectively.
2026 NII and expense outlook: Preliminary 2026 NII ex Markets is about $95 billion, with expenses expected to adjust for seasonality, labor inflation, and growth. Formal guidance to be provided in the fourth quarter earnings.
Credit Costs: Credit costs were $3.4 billion, with net charge-offs of $2.6 billion and a net reserve build of $810 million. Wholesale charge-offs were slightly elevated due to instances of apparent fraud in certain secured lending facilities.
Labor Market and Consumer Resilience: While consumers and small businesses remain resilient, there is close monitoring of a potentially softening labor market, which could impact credit metrics and financial performance.
Capital and CET1 Ratio: The CET1 ratio decreased by 30 basis points to 14.8%, driven by higher risk-weighted assets (RWA) primarily due to increases in wholesale lending and other market activities.
Expense Growth: Expenses increased by 8% year-on-year to $24.3 billion, driven by higher volume and revenue-related expenses, which could pressure margins if revenue growth slows.
Economic and Market Conditions: The firm is exposed to economic uncertainties and market conditions, which could impact net interest income (NII) and other revenue streams.
Fourth Quarter NII ex Markets: Expected to be approximately $23.5 billion.
Fourth Quarter Total NII: Expected to be about $25 billion.
Fourth Quarter Adjusted Expense: Expected to be approximately $24.5 billion, implying $95.9 billion for the full year, driven by a stronger revenue environment.
2025 Card Net Charge-Off Rate: Expected to be approximately 3.3% due to favorable delinquency trends and continued consumer resilience.
2026 NII ex Markets: Preliminary central case is about $95 billion, subject to usual caveats and completion of the annual budget cycle.
2026 Expenses: No update provided yet, but consensus of about $100 billion is considered a little low when adjusted for seasonality, expected labor inflation, and growth.
The selected topic was not discussed during the call.
The earnings call summary indicates strong financial performance with expected growth in NII and card loans, alongside optimistic macroeconomic outlook and strategic investments in technology and AI. Despite some uncertainties, such as credit card APR caps and expense details, the overall sentiment remains positive due to the strategic Apple Card acquisition and focus on long-term growth. The absence of negative surprises and optimistic guidance support a positive stock price movement prediction.
The earnings call summary presents a mixed picture. Financial performance and market strategy are stable, but concerns about the labor market, credit cycle risks, and unclear management responses regarding NBFI exposure dampen sentiment. While the company maintains a strong financial position and positive consumer activity, uncertainties around regulatory changes and economic conditions persist. The lack of guidance on shareholder returns and potential risks in NBFI lending further contribute to a neutral outlook.
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