How did the U.S. biggest bank perform in 2022?
During the summer of 2022, we laid out a thesis about the stock market progressing in the second stage of the bear market. We said that we would look for signs of corporate underperformance and downgrades in forward guidance within earnings statements for 3Q22 and 4Q22. In the 3Q22 earnings season, many companies began downgrading future outlooks and warning investors of a tough time ahead. For some sectors, inventories rose, and revenue streams showed a decline compared to the previous year's period.
With the start of the new earning season, we will pay close attention to the new data, which may or may not confirm our thesis about the market diving deeper into a recession. Interestingly, the last Friday, multiple big banks on wall street announced their earnings statements. These names included JP Morgan Chase, Bank of America, Citigroup, and Wells Fargo.
Today, we will briefly examine the biggest U.S. bank - JP Morgan Chase & Co. This bank has $3.66 trillion in assets and has not posted a yearly loss for more than 15 years. Its earnings report is divided into five segments: Consumer & Community Banking, Corporate and Investment Bank, Commercial Banking, Asset and Wealth Management, and Corporate.
The bank’s Consumer and Community Banking segment showed gradual growth in net income and net revenue quarter after quarter in 2022. Furthermore, it maintained relatively stable noninterest expenses throughout the year. However, despite that, it posted a 29% less net income in 2022 versus 2021.
In 4Q22, the Corporate and Investment Bank experienced a drop of 27% YoY (year over year) in net income. Additionally, in that same period, this division saw a decline in revenue by 9% YoY, and an increase in non-interest expenses by 10%. As for the full-year 2022, the Corporate and Investment Bank brought in 29% less net income versus 2021.
Meanwhile, the Commercial Bank brought $1.4 billion in net income for the company in 4Q22, showing an increase of 15% versus 4Q21. Furthermore, it also enjoyed a rise in revenue by 30% versus 4Q21. Despite that, these two segments underperformed when compared to 2021. For the full-year 2022, the net income of this division dropped 20% versus 2021.
The Asset and Wealth segment showed steady growth in net income quarter after quarter in 2022. However, it also suffered a drop of 8% in net income for the entire year 2022 versus 2021. The Corporate segment posted a net loss in the first three quarters of 2022 and a net gain in 4Q22. But for 2022, it is the only sector that posted a loss while still showing significant improvement from the last year.
For the full-year 2022, JP Morgan Chase & Co. gained $37.7 billion in net income, which is down 22% versus 2021. Its revenue increased by 5.6%, and non-interest expenses jumped by 6.8%. Meanwhile, the company’s stock declined by 16%.
Illustration 1.01
Illustration 1.01 shows the daily chart of JP Morgan Chase stock. The stock declined more than 16% in 2022.
2022 (full-year) vs. 2021 (full-year)
Net income 2022 = $37.7 billion
(vs. $48.3 billion in 2021; -22% YoY)
Revenue 2022 = $132.3 billion
(vs. $125.3 billion in 2021; +6.6% YoY)
Noninterest expenses 2022 = $76.2 billion
(vs. $71.3 billion in 2021; +6.8% YoY)
Pre-Provision profit/loss 2022 = $56.1 billion
(vs. $54 billion in 2021; +4% YoY)
EPS = $3.57
4Q 2022 vs. 4Q 2021 (year over year)
Net income 4Q = $11 billion
(vs. $10.4 billion in 4Q21; +5.8% YoY)
Net revenue 4Q = $35.6 billion
(vs. $30.4 billion in 4Q21; +17%. YoY)
Net interest income 4Q = $20.3 billion (+48% YoY)
Noninterest income 4Q = $15.3 billion (-8% YoY)
Noninterest expenses 4Q = $19.0 billion (+6% YoY)
With the start of the new earning season, we will pay close attention to the new data, which may or may not confirm our thesis about the market diving deeper into a recession. Interestingly, the last Friday, multiple big banks on wall street announced their earnings statements. These names included JP Morgan Chase, Bank of America, Citigroup, and Wells Fargo.
Today, we will briefly examine the biggest U.S. bank - JP Morgan Chase & Co. This bank has $3.66 trillion in assets and has not posted a yearly loss for more than 15 years. Its earnings report is divided into five segments: Consumer & Community Banking, Corporate and Investment Bank, Commercial Banking, Asset and Wealth Management, and Corporate.
The bank’s Consumer and Community Banking segment showed gradual growth in net income and net revenue quarter after quarter in 2022. Furthermore, it maintained relatively stable noninterest expenses throughout the year. However, despite that, it posted a 29% less net income in 2022 versus 2021.
In 4Q22, the Corporate and Investment Bank experienced a drop of 27% YoY (year over year) in net income. Additionally, in that same period, this division saw a decline in revenue by 9% YoY, and an increase in non-interest expenses by 10%. As for the full-year 2022, the Corporate and Investment Bank brought in 29% less net income versus 2021.
Meanwhile, the Commercial Bank brought $1.4 billion in net income for the company in 4Q22, showing an increase of 15% versus 4Q21. Furthermore, it also enjoyed a rise in revenue by 30% versus 4Q21. Despite that, these two segments underperformed when compared to 2021. For the full-year 2022, the net income of this division dropped 20% versus 2021.
The Asset and Wealth segment showed steady growth in net income quarter after quarter in 2022. However, it also suffered a drop of 8% in net income for the entire year 2022 versus 2021. The Corporate segment posted a net loss in the first three quarters of 2022 and a net gain in 4Q22. But for 2022, it is the only sector that posted a loss while still showing significant improvement from the last year.
For the full-year 2022, JP Morgan Chase & Co. gained $37.7 billion in net income, which is down 22% versus 2021. Its revenue increased by 5.6%, and non-interest expenses jumped by 6.8%. Meanwhile, the company’s stock declined by 16%.
Illustration 1.01
2022 (full-year) vs. 2021 (full-year)
Net income 2022 = $37.7 billion
(vs. $48.3 billion in 2021; -22% YoY)
Revenue 2022 = $132.3 billion
(vs. $125.3 billion in 2021; +6.6% YoY)
Noninterest expenses 2022 = $76.2 billion
(vs. $71.3 billion in 2021; +6.8% YoY)
Pre-Provision profit/loss 2022 = $56.1 billion
(vs. $54 billion in 2021; +4% YoY)
EPS = $3.57
4Q 2022 vs. 4Q 2021 (year over year)
Net income 4Q = $11 billion
(vs. $10.4 billion in 4Q21; +5.8% YoY)
Net revenue 4Q = $35.6 billion
(vs. $30.4 billion in 4Q21; +17%. YoY)
Net interest income 4Q = $20.3 billion (+48% YoY)
Noninterest income 4Q = $15.3 billion (-8% YoY)
Noninterest expenses 4Q = $19.0 billion (+6% YoY)
Trade active:
Net profit decline (YoY) in 2022 by the bank (in % terms).
Bank of America $BAC = -14% YoY
JP Morgan Chase $JPM = -22% YoY
Morgan Stanley $MS = -26% YoY
Citigroup $C = -32% YoY
Wells Fargo $WFC = -38% YoY
Bank of America $BAC = -14% YoY
JP Morgan Chase $JPM = -22% YoY
Morgan Stanley $MS = -26% YoY
Citigroup $C = -32% YoY
Wells Fargo $WFC = -38% YoY
