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JPMorgan Chase earnings soar, but mortgage sector falls

Mortgage revenue declines 11% due to lower net servicing

In the first quarter of 2019, JPMorgan Chase saw a tremendous increase in its earnings from both the previous quarter and previous year – despite a slowdown in its origination volume.

After retreating to $7.1 billion in the fourth quarter of 2018, JPMorgan’s profits rocketed in Q1 of 2019 to $9.2 billion. Notably, this is also an increase from $8.7 billion in the first quarter of last year.

This increase now pushes the bank’s total earnings per share to $2.65, up from $2.37 in the first quarter of 2018 and from $1.98 in the fourth quarter of that year.

In Q1, Chase’s revenues also grew, increasing from $26.8 billion in the fourth quarter and $28.5 billion in the first quarter of last year to $29.9 billion in 2019.

The majority of consumer and business banking revenue, which increased 15% to $6.6 billion in the first quarter of this year, was driven primarily by higher net interest income as a result of higher deposit margins and balance growth.

“In consumer and community banking, client investment assets topped $300 billion, with record new money driven by our physical and digital channels,” JPMorgan Chairman and CEO Jamie Dimon said. “Consumer spending remains robust with credit card sales and merchant processing volume up double digits.”

Despite these improvements, the bank’s home lending sector worked against these increases, as revenue declined 11% to $1.3 billion due to lower net servicing.

That being said, JPMorgan continues to keep an optimistic view for what's in store for the remainder of the year. 

“In the first quarter of 2019, we had record revenue and net income, strong performance across each of our major businesses and a more constructive environment,” Dimon said. “Even amid some global geopolitical uncertainty, the U.S. economy continues to grow, employment and wages are going up, inflation is moderate, financial markets are healthy and consumer and business confidence remains strong.”

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