JPMorgan Chase & Co. (JPM) is a global financial services holding company and the largest U.S. bank by assets. The company provides services including consumer banking, investment banking, commercial banking, and asset management for individuals, corporations, institutions, and governments globally. New York City-based JPMorgan competes internationally with a broad range of banks, brokerage firms, investment banking companies, hedge funds, commodity trading companies, private equity firms, insurance companies and investment managers, including Bank of America Corp. (BAC), Citigroup Inc. (C), Morgan Stanley (MS), Wells Fargo & Co. (WFC), and Goldman Sachs Group Inc. (GS).

Key Takeaways

  • JPMorgan provides financial services to consumers, small businesses, large corporations, governments and other clients.
  • Its Consumer & Community Banking segment is the largest source of revenue.
  • The Corporate & Investment Bank segment is the largest source of net income and is growing fast.
  • JPMorgan faces a potential fine over historical deficiencies in internal controls and internal audit related to advisory and other activities.

JPMorgan’s Financials

JPMorgan posted net income of $9.4 billion on revenue of $29.1 billion in Q3 2020, which ended September 30, 2020. Revenue fell 0.5% compared to the same three-month period a year ago. The slight decline in revenue was entirely driven by an 8.5% decrease in net interest income, which was only offset by a 7.1% rise in non-interest revenue.

Net income rose 4.0% in Q3 2020 compared to the year-ago quarter. Despite relatively flat revenue, JPMorgan's net income was boosted by lower provision for credit losses and a slightly lower income tax expense compared to the same three-month period a year ago. Provision for credit losses in the third quarter were also sharply lower than in Q2 2020, when the bank set aside additional provisions amid the economic uncertainty triggered by the COVID-19 pandemic.

JPMorgan’s Business Segments

JPMorgan breaks down its revenue and net income 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 is done on a non-GAAP basis. Total non-GAAP revenue in Q3 2020 was $29.9 billion, approximately $0.8 billion more than GAAP revenue. Total non-GAAP net income for the year was $9.4 billion, the same as GAAP net income.

Consumer & Community Banking

JPMorgan's Consumer & Community Banking segment provides a variety of services to consumers and businesses including deposit and investment products, cash management, payment solutions, mortgage origination and servicing, credit-card issuance, and auto loans. The segment reported net income of $3.9 billion in Q3 2020, down 8.8% from the year-ago quarter. Revenue for the segment was $12.8 billion, down 8.6% from the same three-month period a year ago. The segment accounts for about 38% of total net income and about 42% of total non-GAAP revenue.

Corporate & Investment Bank

JPMorgan's Corporate & Investment Bank segment provides investment banking, market-making, prime brokerage, and treasury and securities products and services to corporations, investors, financial institutions, and governments. Net income for the segment grew 52.0% in Q3 2020 compared to the same quarter a year ago. At $4.3 billion, the segment accounts for about 42% of JPMorgan's total net income. Revenue for the segment grew 20.8% to $11.5 billion for the quarter, comprising about 38% of total non-GAAP revenue.

Commercial Banking

JPMorgan's Commercial Banking segment offers comprehensive financial solutions, including lending, treasury services, investment banking, and asset management products to clients including small businesses, midsized and large corporations, and local governments. The segment posted net income of $1.1 billion in Q3 2020, up 15.4% from the year-ago quarter and comprising about 11% of the total. Revenue for the segment grew 0.5% to $2.3 billion, comprising nearly 8% of total non-GAAP revenue.

Asset & Wealth Management

JPMorgan's Asset & Wealth Management segment provides services across all asset classes, and has $2.6 trillion of assets under management (AUM). The segment also provides retirement products and services, as well as brokerage and banking. Net income rose 31.3% in Q3 2020 to $877 million, comprising nearly 9% of JPMorgan's total net income. Revenue grew 4.7% compared to the year-ago quarter. At $3.7 billion, revenue for the segment accounts for about 12% of total non-GAAP revenue.

Corporate

JPMorgan's Corporate segment measures, monitors, reports, and manages the bank's liquidity, funding, capital, and foreign exchange risks, among other functions. The segment reported a net loss of $699 million in Q3 2020 compared to net income of $393 million in the same three-month period a year ago. Revenue for the segment was also negative at -$339 million compared to $692 million in Q3 2019.

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

JPMorgan’s Recent Developments

JPMorgan is facing a potential fine related to historical deficiencies in internal controls and internal audit concerning advisory and other activities. The bank said it was engaged in resolution discussions with the U.S. regulator, who had informed the bank of the potential fine. The news comes just weeks after JPMorgan agreed to pay $920 million to settle investigations by three federal agencies concerning the bank's role in manipulating global markets for metals and U.S. Treasury securities.

How JPMorgan Reports Diversity & Inclusiveness

As part of our effort to improve the awareness of the importance of diversity in companies, we offer investors a glimpse into the transparency of JPMorgan and its commitment to diversity, inclusiveness, and social responsibility. We examined the data JPMorgan releases to show you how it reports the diversity of its board and workforce to help readers make educated purchasing and investing decisions.

Below is a table of potential diversity measurements. It shows whether JPMorgan discloses its data about the diversity of its board of directors, C-Suite, general management, and employees overall, as is marked with a ✔. It also shows whether JPMorgan breaks down those reports to reveal the diversity of itself by race, gender, ability, veteran status, and LGBTQ+ identity.

JPMorgan Diversity & Inclusiveness Reporting
  Race Gender Ability Veteran Status Sexual Orientation
Board of Directors ✔ (U.S. Only)      
C-Suite
✔ (U.S. Only)
     
General Management ✔ (U.S. Only) ✔ (U.S. Only) ✔ (U.S. Only) ✔ (U.S. Only)
Employees ✔ (U.S. Only) ✔  ✔ (U.S. Only) ✔ (U.S. Only) ✔ (U.S. Only)