JPMorgan's Business Model

Nov 17, 2023 By Triston Martin

JPMorgan Chase & Co. (JPM), a global financial services holding firm, is the largest bank in the US by assets. The company provides people, businesses, institutions, and governments worldwide with asset management, investment banking, commercial banking, and consumer banking services.

Firms That Trade Commodities

businesses situated in New York City that deal in commodities Bank of America Corp. (BAC), Citigroup Inc. (C), Morgan Stanley (MS), Wells Fargo & Co. (WFC), and Goldman Sachs Group Inc., as well as hedge funds, private equity firms, commodity trading firms, insurance companies, and investment managers, are just a few of the numerous international financial institutions that compete with JPMorgan (GS).

JPMorgan's financial data

JPMorgan presented its financial results for Q4 of its fiscal year (FY) 2021, which included the three months that ended on December 31, 2021, in the middle of January. Net income for the quarter was $10.4 billion, down 14.3% from last year's. Revenue dropped 0.3% yearly to $29.3 billion (YOY).

3 The primary factor for the revenue loss was a 2.6% decrease in non-interest revenue, which was only partially offset by a 2.6% increase in net interest income. The firm has built up loan loss reserves throughout the epidemic to protect against probable loan defaults amid the health crisis and associated detrimental economic impact.

The business categories used by JPMorgan to classify its revenue and net income are Consumer & Community Banking, Corporate & Investment Banking, Commercial Banking, Asset & Wealth Management, and Corporate. Contrary to JPMorgan's overall financial data, the segment breakdown is performed on a non-GAAP basis.

Non-GAAP revenue in Q4 of FY 2021 was $30.3 billion, or roughly $1.1 billion more than GAAP sales. The sum of the quarter's non-GAAP and GAAP net income was $10.4 billion.

Banking for Community & Consumers

Among the services provided by JPMorgan's Consumer & Community Banking business include a variety of deposit and investment products, cash management services, payment alternatives, mortgage origination and servicing, credit card issuance, and auto loans.

The segment's net income in Q4 FY 2021 was $4.2 billion, 2.3% less than it had been in the previous quarter. Revenue for the category was $12.3 billion, down 3.6% from the prior year. The segment accounts for about 37% of total net income and 40% of total non-GAAP revenue.

Bank for Corporate & Investment

Corporate & Investment Bank, a part of JPMorgan, provides investment banking, market-making, prime brokerage, and treasury and securities products and services to businesses, investors, financial institutions, and governments.

The segment's net income fell 9.4% year over year in Q4 FY 2021. The division's $4.8 billion revenue accounts for about 42% of JPMorgan's total net profit. During the quarter, the segment's sales climbed 1.6% year over year to $11.5 billion, accounting for about 37% of all non-GAAP revenue.

Commercial Banking

JPMorgan's Commercial Banking division offers comprehensive financial solutions, including loans, payments, investment banking, and asset management products, to clients that include small businesses, mid-sized and large organizations, and local governments.

The segment's net income for Q4 FY 2021 was $1.3 billion, a 38.5% decline from the prior quarter and almost 11% of the total. Sales for the division rose by 6.0% to $2.6 billion, making up more than 8% of all non-GAAP revenue.

Asset & Wealth Management, a division of JPMorgan, manages client assets totalling $4.3 trillion and provides services for all asset types. The region offers retirement-related goods and services in addition to brokerage and banking services. Net income climbed by 45.8% yearly to $1.1 billion in Q4 FY 2021, accounting for 10% of JPMorgan's total net profits. Revenue rose by 15.7% in Q4 FY 2020 compared to Q4 FY 2020. The segment's $4.5 billion revenue accounts for more than 14% of all non-GAAP revenue.

Corporate

The corporate division of JPMorgan measures, monitors, reports and manages the bank's capital, funding, liquidity, and foreign exchange risks, among other things.

The division reported a net loss of $1.1 billion in Q4 FY 2021 instead of $358 million in the same quarter the year before. The segment's revenue also dropped from -$249 million in Q4 FY 2020 to -$545 million this quarter.

(Note that the % share estimates for revenue and net income in the preceding pie charts do not include negative revenue and net income segments.)

Recent JPMorgan Chase developments

On January 25, 2022, JPMorgan announced that it had agreed to acquire a 49% stake in Viva Wallet Holdings Software Development S.A. The European fintech firm provides a cloud-based payments platform with various value-added services for small and medium-sized businesses. The financial information about the purchase was kept private.

Reporting on JPMorgan's Diversity & Inclusivity

To increase investor awareness of the importance of diversity in organizations, we give investors a glimpse into JPMorgan's openness and commitment to diversity, inclusivity, and social responsibility. We examined the data that JPMorgan distributes to demonstrate how JPMorgan reports the variety of its board and personnel to assist readers in making the wise purchase and investment decisions.

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