Despite a decline in client assets, JPMorgan Chase & Co.’s wealth management businesses generated stronger second-quarter revenue, as the company reported better than expected second-quarter earnings.
Assets under management declined 5% to $1.16 trillion as customers withdrew $29 billion from cash-like funds during the quarter and $126 billion over the past year. During the quarter, investors added $13 billion to longer-term stock and bond funds.
JPMorgan Chase's [JPM] private banking revenue rose 9% from a year earlier to $695 million and its private wealth management business, revenue rose 4% to $348 million.
Revenue in JPMorgan Securities, a private client brokerage business acquired with Bear Stearns in 2008, remained steady at $110 million.
In its brokerage unit, the company added 12 advisers to give it 402. Its assets increased 6.7% to $15 billion.
Despite some pessimism from its top executive, the parent company reported earnings rose 76% from a year earlier to $4.8 billion, topping analyst estimates as net income increased in every business line except investment banking.
The company reported a profit of $1.09 a share, up from 28 cents a share a year earlier. Analysts polled by Thomson Reuters expected earnings of 67 cents per share.
But Jamie Dimon, the company chief executive officer said in a press release that losses from bad consumer loans "remain at extremely high levels and therefore returns in our consumer-lending businesses are still unacceptable. As a result, these businesses did not meet expectations nor generate satisfactory returns on capital for our shareholders. It is too early to say how much improvement we will see from here."
Profits declined 6.1% in the company’s investment-banking arm, where revenue declined 13%. The investment banking business, which generated $1.4 billion in profits, after generating $2.5 billion in the first quarter.
During an earnings call Thursday, Dimon said that competition has increased in the investment banking space.
"I think that's a good thing," he said, though the trend is costing him some business, he said. "We're going to have to fight for it inch by inch, foot by foot, yard by yard, mile by mile."