At the start of the earnings season, banking giant JPMorgan Chase reported third quarter results that beat Street expectations, supported by growth in credit and debit card spending.
Management noted in the earnings documents and on the conference call with analysts to discuss the results that continued economic recovery and consumer confidence had boosted earnings.
As CEO Jamie Dimon said on the call, âThe consumer is in great shape. Capitalism works.
As seen in previous quarters, the company freed up $ 2.1 billion in loan reserves, which in turn boosted net income. As a result, earnings of $ 3.74 per share were above the consensus of $ 3 per share.
As for other headlines, the company said revenue was $ 30.5 billion, better than the roughly $ 30 billion Street expected.
Additional documents and results presentation media released by the company showed that overall credit and debit card sales volume grew 26% year-over-year to just under $ 350 billion. But digging a little deeper, we can see that credit card lending growth remained subdued, up just over 1% in the quarter, measured year-over-year to $ 142 billion. dollars at the end of the period. Card sales volume in the last quarter, excluding commercial cards, was $ 232 billion in the most recent period, up more than 9.7% on a net income rate.
During the call with analysts, CFO Jeremy Barnum said it will take “time” for these credit balances to reach levels seen before the pandemic.
Net card billing rates were 1.4%, up from nearly 3% a year ago.
As a sign of better consumer financial health, the company said average deposits in its personal and community banking segment were $ 1,000 billion, up 20% year on year.
Active digital customers, the company said in its results, stood at just under 58 million, a 6% increase year-over-year. Active mobile customers were 44.3 million, up 10% year-on-year.
On the conference call, analysts noted the growth of buy now, pay later (BNPL) in financial services, and management said space remains an area the bank is actively monitoring. Echoing comments made on previous calls about JPMorgan’s appetite for acquisitions – in general – Dimon said “we’ll spend whatever we have to spend to be competitive.”