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 and fastest growing source of revenue and income.
  • JPMorgan plans to expand its retail banking business, including launching digital banking services in the U.K.
  • The bank recently issued a non-essential travel restriction to its employees due to coronavirus.

JPMorgan’s Financials

JPMorgan posted net income of $36.4 billion on revenue of $115.6 billion for fiscal year (FY) 2019, which ended December 31, 2019. Revenue growth slowed to 6.1% for the year compared to 8.3% for 2018, but it was still higher than the rates of growth posted in 2017 and 2016. Revenue growth in 2019 was largely driven by increases in non-interest revenue, up 8.2% compared to the previous year. Growth in net interest income slowed to 4.0% in 2019 from a rate of 9.9% in 2018.

Net income grew 12.2% in 2019, significantly lower than the 32.9% annual growth posted in 2018. Net income in both years benefited from the Tax Cuts and Jobs Act enacted at the end of 2017. However, net income growth in 2018 was also partly abnormally inflated because of the net income decline posted in 2017, which was at least partly due to one-time tax expenses related to the Act.

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 segments' breakdown is done on a non-GAAP basis. Total non-GAAP revenue in 2019 was $118.7 billion, approximately $3 billion more than GAAP revenue. Total non-GAAP net income for the year was $36.4 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. Net income for the segment grew 12.0% during 2019 to reach a record $16.6 billion, comprising nearly 46% of JPMorgan's total net income. Revenue for the segment grew 7.3% for the year and also hit a new record of $55.9 billion, comprising more than 47% 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 1.3% during 2019 to reach a record $11.9 billion, comprising about 33% of JPMorgan's total net income. Revenue for the segment grew 5.1% for the year and also hit a new record of $38.3 billion, comprising about 32% 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. Net income for the segment fell 7.4% during 2019 to $3.9 billion, comprising nearly 11% of JPMorgan's total net income. Revenue for the segment fell 0.8% for the year to $9.0 billion, comprising about 8% of total non-GAAP revenue.

Asset & Wealth Management

JPMorgan's Asset & Wealth Management segment provides services across all asset classes, managing $3.2 trillion worth of client assets. The segment also provides retirement products and services, as well as brokerage and banking. Net income fell 0.7% during 2019 to $2.8 billion, comprising nearly 8% of JPMorgan's total net income. Revenue grew 1.7% for the year to a record $14.3 billion, comprising 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. After at least two consecutive years of net losses, the segment posted positive net income of $1.1 billion for 2019, comprising 3.0% of JPMorgan's total net income. Revenue also shifted from being negative in 2018 to positive $1.2 billion in 2019, comprising 1.0% of total non-GAAP revenue. 

JPMorgan’s Recent Developments

JPMorgan issued a memo to staff late last week restricting non-essential travel in order to protect employees from the spread of the coronavirus. Previously, the company had limited the travel restrictions to regions where the spread of the deadly virus had been heaviest.

JPMorgan also is currently in talks to launch a digital bank in the U.K. The move would help to extend the firm's retail banking services even as other global banks prepare to move operations out of the region due to Brexit, the formal secession of the U.K. from the EU.