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JPM Beats Thanks To $1.1 Billion Reserve Release, Revenue Misses, Drops By $900 Million, NIM At Post-Crisis Low

Tyler Durden's picture




 

If JPM and its "fortress" balance sheet and business model are supposed to represent Q1 earnings for US banks, it will not be a good start to the year. While EPS beat expectations solidly, coming at $1.59 on expectations of $1.39 print, this was largly driven by a bigger than expected loan loss reserve release in its real estate portfolios ($650MM pretax), and card services ($500MM pretax), which was the largest combined release number since the $2 billion reduction in Q1 2012. This took down total JPM total loan loss reserves to $20.8 billion, down from $21.9 billion in Q4, and down $5.1 billion from the $25.9 billion a year ago. This happened even though JPM's NPL declined far more modestly, from $10.7 billion to just $10.4 billion. It was the revenue of $25.12 that missed expectations of $25.85, down from $26.05 billion a year ago, and which is the bigger issue for the bank, driven by disappointing trading results with fixed income markets revenue of $4.8 Billion, down 5% YoY, equity markets revenue of $1.3 Billion, down 6% YoY, and Securities Services revenue of $974mm, flat YoY. Not surprisingly in order to maintain expenses, headcount continue to decline from 258,753 to 255,898.

Those curious how the infamous CIO prop trading desk did, here it is straight from the horse's mouth: "Treasury and CIO reported net income of $24 million, compared with a net loss of $227 million in the prior year. Net revenue was $113 million, compared with a loss of $233 million in the prior year. Net revenue included net securities gains of $503 million from sales of available-for-sale investment securities during the current quarter. Net interest income was a loss of $472 million due to low interest rates and limited reinvestment opportunities."

Curiously, VaR plunged from $106 to $62 - another excel copy/paste error?

Net Interest margin, firmwide and core, declined by 3 and 2 bps respectively, as the ongoing encroachment of the long-end by the Fed does nothing to help the traditional bank business model of borrowing cheap and lending rich.

Finally, those curious if JPM was buying or selling Italian and Spanish bonds, we have news: in Q1 the firm reduced its net European exposure from $13.9 to $12.3, with Spain exposure down from $4.7 billion to $3.4 and Italy exposure down from $7.6 billion to $7.1. Luckily, with Italian banks loaded up with more BTPs than ever before and Japan now purchasing "safe" Italian paper outright, there is no concern of losing yet another margin buyer.

Summary Q1 results (from the supplement):

JPM Loan Loss Reserve releases:

 

JPM Q1 Trading results - down:

 

Net Interest Margin:

 

European Exposure:

 

Full earnings presentation (pdf):

 

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Fri, 04/12/2013 - 07:45 | 3440015 MFLTucson
MFLTucson's picture

Who cares anymore, this countrys finacial sytem is an outright cesspool of liars and theifs.  Look at Gold, these Jewish gangsters will not stop till they have control and have ruined each of us.  150 points higer is the circus today?  Proabably!

Fri, 04/12/2013 - 08:06 | 3440048 johnQpublic
johnQpublic's picture

howm do you think their bitcoin position performed?

Fri, 04/12/2013 - 08:27 | 3440082 DeadFred
DeadFred's picture

Speaking of which and not entirely off topic since JPM is probably a primary actor, gold is quickly heading to 1525. Will the Chinese positions still be there?

Fri, 04/12/2013 - 07:44 | 3440017 GetZeeGold
GetZeeGold's picture

 

 

Not sure if I should cheer.......or cry.

Fri, 04/12/2013 - 07:47 | 3440020 stocktivity
stocktivity's picture

Neither....It's all Bullshit!!!

Fri, 04/12/2013 - 07:47 | 3440021 ZippyBananaPants
ZippyBananaPants's picture

I'm hoping to have a larger than normal release this morning too.

Tacos last night

Fri, 04/12/2013 - 07:56 | 3440036 krispkritter
krispkritter's picture

 Release the Dimon!

Fri, 04/12/2013 - 08:00 | 3440043 ihedgemyhedges
ihedgemyhedges's picture

I asked my wife for a "release" last night.  She said "Sure, I'll leave you alone for 10 minutes.  That enough time?"..........................

Fri, 04/12/2013 - 08:12 | 3440057 Jacque Itch
Jacque Itch's picture

Take your Dimon and wipe your Bernanke

Fri, 04/12/2013 - 07:47 | 3440023 scatterbrains
scatterbrains's picture

sniff sniff..  I think I smell sulfur up in this piece.   Might want to keep an eye on crude.

The slog hits this one out of the park this morning..

http://hat4uk.wordpress.com/2013/04/12/global-looting-how-the-fat-cats-w...

Fri, 04/12/2013 - 08:18 | 3440070 johnQpublic
johnQpublic's picture

good link. good read. +1

Fri, 04/12/2013 - 07:48 | 3440024 TeamDepends
TeamDepends's picture

You'll get yours, Caesar.

Fri, 04/12/2013 - 07:48 | 3440026 q99x2
q99x2's picture

Arrest Jamie Dimon for bribery and treasonous acts against the United States of America. Ask him where the US Gov't gold reservers are. Don't let him get away.

Fri, 04/12/2013 - 07:55 | 3440035 hungarianboy
hungarianboy's picture

Green shoots :-)

Fri, 04/12/2013 - 08:11 | 3440052 Ljoot
Ljoot's picture

I like money.

http://youtu.be/sZHCVyllnck

 

Fri, 04/12/2013 - 08:17 | 3440063 GetZeeGold
GetZeeGold's picture

 

 

I wash it down with Brawndo.....it's got electrolytes.

http://www.youtube.com/watch?v=-Vw2CrY9Igs

Fri, 04/12/2013 - 08:16 | 3440064 firstdivision
firstdivision's picture

NIM is how old banks make money, so no one cares anymore.  It's all about VAR in today's world, and the higher the VAR, the more successful the bank is.

Fri, 04/12/2013 - 08:20 | 3440073 Riggers
Riggers's picture

I really wish I effing understood a word of that. I'm sure it's all important but it makes no sense to me!

Fri, 04/12/2013 - 08:23 | 3440077 Miles Kendig
Miles Kendig's picture

Net Interest margin, firmwide and core, declined by 3 and 2 bps
respectively, as the ongoing encroachment of the long-end by the Fed
does nothing to help the traditional bank business model of borrowing
cheap and lending rich.

The intent of ZIRP is to crush profitability of 'traditional' bank lending and transform the industry by incentivizing different behavior - Ben Ber_nank

Fri, 04/12/2013 - 08:31 | 3440103 orangegeek
orangegeek's picture

MSM reporting JPM beat earnings and revenue.  Figures.

 

NIM is an interesting result  - no one is borrowing - take that JPM.

Fri, 04/12/2013 - 09:02 | 3440237 HD
HD's picture

This is the best JPM can do with money falling from the sky and every market manipulated? Being on the Fed's email list isn't what it used to be.

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