JPM company overview


Here are the three main questions to answer:

  1. How do they make money?
  2. Who are their competitors?
  3. Why that business will grow?

How does JPM make money?

JPMorgan makes money from their consumer banking, investment banking, commercial banking, and asset management services for individuals as well as corporations, institutions, and governments.

Who are their competitors?

  • Bank of America Corp. (BAC)
  • Citigroup Inc. (C)
  • Morgan Stanley (MS)
  • Wells Fargo & Co. (WFC)
  • Goldman Sachs Group Inc. (GS)

Why will JPMorgan keep growing and be successful?

With JPMorgan already being one of the largest banks, there is still room for growth and improvement.

Over the past year, they have expanded and opened retail branches in cities without a physical presence of their bank.

Their wealth management unit had more than $2.7 trillion under management. From where they generated $14.2 billion in revenue and gave 28% return on equity to investors in 2020.

Their asset management unit has also been doing well, which deals more with stocks, bonds and mutual funds.

Their wholesale payment unit is growing as well. This includes merchant services that offer payment processing with fraud and risk management.

JPMorgan issues plenty of credit cards and recently acquired a company and might start offering deals related to traveling, which they think will soon rebound.

JPMorgan might the first foreign-owned futures business in China.

JPMorgan’s major source of income is consumer and community banking.

JPMorgan Chase & Co. (JPM) is a holding company for global financial services and the largest bank in America by assets.

The company offers a wide variety of services, including consumer banking, investment banking, commercial banking, and asset management for individuals as well as corporations, institutions, and governments across the globe.

JPMorgan is a leading global bank based in New York City that competes with other banks, brokerages, investment banking firms, hedge funds, commodity trading companies, private equity firms, insurance companies, and investment managers such as Bank of America Corp. (BAC), Citigroup Inc. (C), Morgan Stanley (MS), Wells Fargo & Co. (WFC), and Goldman Sachs Group Inc. (GS).

Financials of JPMorgan

JPMorgan Chase & Co. announced in mid-January its accountability for the fourth quarter of its 2021 fiscal year, more commonly referred to as Q4 FY21. More specifically, this three-month period ended on December 31st, 2021. Consequently, net income saw a decrease from $10.4 billion (Q4 FY20) down to 14.3%. However, revenue only fell slightly by .03%, bringing in a total of $29.3 billion.

The minor revenue decline was due to a 2.6% decrease in non-interest income, which was somewhat offset by a 2.6% increase in net interest income.

Although there were a few challenges the economy faced last quarter, such as inflation and difficulties with supply chains, the bank mentioned in its fourth-quarter earnings report that things continued to go well.

JPMorgan noted an uptick in lending activity, with average firmwide loans increasing by 6%. The bank’s earnings were additionally bolstered by a $1.8 billion net reserve release.

The company set aside more money to cover possible defaults on loans taken out during the pandemic, in case borrowers couldn’t keep up with their payments due to the economic downturn.

The different business segments of JPMorgan

JPMorgan’s revenue and net income are divided into the following business segments: Consumer & Community Banking; Corporate & Investment Bank; Commercial Banking; Asset & Wealth Management; and Corporate. Unlike JPMorgan’s companywide financial numbers, the segment breakdown uses a non-GAAP basis.

Non-GAAP revenue for the fourth quarter of 2021 was $30.3 billion, which is about $1.1 billion more than GAAP revenue. Non-GAAP net income for the period was $10.4 billion, identical to GAAP net income.

Consumer & Community Banking

JPMorgan Chase & Co. (JPM) is a multinational banking and financial services company with operations in the United States and abroad. JPMorgan Chase & Co.’s Consumer & Community Banking business offers a variety of products and services to consumers, including deposit, investment, cash management, payment solutions, mortgage origination and servicing, credit-card issuance, as well as auto loans.

The segment’s net income was $4.2 billion in Q4 FY 2021, which is a 2.3% decrease from the previous year. Additionally, revenue for the segment totaled $12.3 billion this past quarter–a 3.6% decline from last year. This segment makes up approximately 37% of total net income and 40% of non-GAAP revenue overall.

Corporate & Investment Bank

The Corporate & Investment Bank segment of JPMorgan Chase comprises investment banking, market-making, prime brokerage, and treasury and securities services for businesses, investors, financial institutions, and governments.

Net income in the fourth quarter of fiscal year 2021 for this segment decreased 9.4% from the previous year, coming to a total of $4.8 billion. This part of JPMorgan Chase & Co. 42% of their total net income, with a revenue growth at 1.6% amounting to $11.5 billion dollars, which is 37% fo their non-GAAP revenue.

Commercial banking

JPMorgan Chase & Co. is a multinational banking and financial services corporation headquartered in New York City, with over 60 million clients and $1.5 trillion of assets under management as of March 31, 2016. The company offers comprehensive financial solutions, such as lending, payments, investment banking services, and asset management products to customers including small businesses, midsized enterprises, and large corporations throughout the world.

The segment’s net income in Q4 FY 2021 was $1.3 billion, which is a 38.5% decrease from the previous year quarter and comprises about 11% of the total revenue. The segment’s revenue grew by 6.0%, amounting to $2.6 billion, comprising more than 8% of total non-GAAP revenue.

Asset & Wealth Management

JPMorgan Asset Management leads the company’s asset management, hedge fund services and wealth management businesses. The section also offers retirement plans and services, as well as brokerage and banking services.

In Q4 FY 2021, the firm’s net income rose 45.8 percent from a year earlier to $1.1 billion, accounting for 10% of overall net income at JPMorgan. Revenue increased 15.7 percent over the previous year, reaching $4.5 billion in revenue for the segment as a whole, which accounts for more than 14% of total non-GAAP revenue.

Corporate

The Corporate segment at JPMorgan comprises liquidity, funding, capital, and foreign exchange risks among other things.

The company’s medical device unit, which makes pacemakers and defibrillators, reported a loss of $1.1 billion in the fourth quarter of FY 2021 versus a net loss of $358 million in the same period last year. The segment’s revenue was also negative at -$545 million compared to -$249 million in Q4 2020.

(Note: segments with negative revenue and/or net income are disregarded from the revenue and net income percentage share calculations and pie charts above.)

JPMorgan diversification and inclusiveness

They also provided investors with a closer look at JPMorgan’s transparency and dedication to diversity, inclusiveness, and social responsibility as part of their goal to raise awareness of the need for diversity in companies.


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