For banking giant JPMorgan, the fourth quarter showed continued momentum in credit and debit spending, and double-digit gains in active mobile customers, as measured in year-over-year growth.
Debit and credit sales volume was $376.2 billion in the most recent period, up 26% year on year.
Credit card sales volumes were up 29% from last year, to a recent $254.1 billion.
CEO Jamie Dimon said in the earnings announcement that the U.S. economy continues to do well despite pressure from the lingering pandemic and supply chain bottlenecks. Dimon said in the release that “credit continues to be healthy with exceptionally low net charge-offs, and we remain optimistic on U.S. economic growth.”
Drilling down into the chargeoffs as detailed in earnings supplementals, the total net charge offs in the most recent quarter stood at $515 million, down from $817 million a year ago; the total allowance for loan losses shrank to $12.3 billion in the fourth quarter from more than $22 billion a year ago.
In one data point that signals the health of the consumer, the company said that the card portfolio showed a $1.4 billion reserve release, vs. no releases taken in the fourth quarter of 2020.
In terms of headline numbers, the bank posted earnings of $3.33, topping the Street at $3.01. As has been seen in past quarters, for JPMorgan (and its peers), a release of reserves helped the bottom line, by about 46 cents a share. Total company revenues, on a consolidated basis, were $30.3 billion, up 1% YoY.
During the conference call with analysts, CFO Jeremy Barnum said that there will be “headwinds” tied to higher expenses, in part due to higher labor costs and inflation.
The Digital Shift
As for the great digital shift: The company noted that its branch count at the end of the most recent quarter stood at 4,790, down 2% from the fourth quarter of 2020. Total active digital customers in the quarter stood at 58.9 million, gaining 6% year over year, and 2% sequentially. The active mobile customers outpaced those rates, growing to 45.5 million, up 11% from last year’s fourth quarter.
On the balance sheet, as detailed in the earnings presentation, average loans, excluding those issued under the PPP, were $1.1 trillion, up 8% as measured year on year. Card average loans in the quarter stood at $148.5 billion, up from $141.2 billion a year ago.
Management noted on the conference call with analysts that spending on technology has been topping $12 billion on an annual basis, with half of that tied to regulatory-related and modernization effort. There will be continued focus on data and analytics and artificial intelligence (AI), according to commentary on the call. The other half of the investment spend is meant, as the CFO said, “to drive innovation across our businesses and with our client facing products, we believe it’s critical to identify and resolve customer pain points and improve the user experience.” He pointed to digital offerings such as Chase My Home (for mortgages), Onyx and real time payments initiatives.
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