JPMorgan Chase Q3 2023: CEO Jamie Dimon on "Most Dangerous Time in Decades"

On 13 October 2023, JPMorgan Chase (NYSE: JPM) announced its financial results for the third quarter of 2023. Jamie Dimon, the Chairman and CEO of the financial giant, provided insights into the company’s performance and future outlook in both a press release and during the earnings call.

Press Release Insights

Jamie Dimon stated that the company had a robust quarter, reporting a net income of $13.2 billion and a Return on Tangible Common Equity (ROTCE) of 22%. However, he noted that these impressive figures were partly due to higher-than-average net interest income and unusually low credit costs, both of which he expects to normalize over time. The company’s Common Equity Tier 1 (CET1) capital ratio increased to 14.3%.

Dimon also emphasized the company’s strong financial position, with a total loss-absorbing capacity (comprising equity and long-term debt) of $496 billion. The firm’s riskiest assets, loans, stood at $1.3 trillion, while its liquidity was exceptionally high, with cash and marketable securities totaling $1.4 trillion.

Looking forward, Dimon mentioned that the company is prepared to quickly adapt to the upcoming Basel III regulations. However, he warned that such significant regulatory changes could have real-world implications for markets and end-users.

In terms of business lines, the company continued to see growth. In Consumer & Community Banking (CCB), JPMorgan Chase ranked first in U.S. retail deposits and saw its growth from new accounts exceed that of its competitors by threefold. In Corporate & Investment Banking (CIB), the firm maintained its top position in Dealogic rankings and increased its investment banking market share year-to-date. Commercial Banking (CB) saw a 30% increase in Payments revenue, while Asset & Wealth Management (AWM) experienced net inflows of $60 billion. The company also extended credit and raised $1.7 trillion in capital for various entities year-to-date.

Dimon concluded by stating that while U.S. consumers and businesses are generally in good health, there are increasing risks due to tight labor markets, high government debt levels, and large peacetime fiscal deficits.

He also expressed concerns about the potential impacts of the war in Ukraine and recent attacks on Israel on global markets:

“Furthermore, the war in Ukraine compounded by last week’s attacks on Israel may have far-reaching impacts on energy and food markets, global trade, and geopolitical relationships. This may be the most dangerous time the world has seen in decades.“

Earnings Call Remarks

During the earnings call, Dimon expressed his sorrow over the recent attacks on Israel:

“I just want to say how deeply saddened that we all are about the recent horrific attacks on Israel and the resulting bloodshed and more .. and all of our hearts here at JPMorgan Chase go out to all who are suffering.”

He also discussed the lingering effects of fiscal and monetary stimulus in the system, cautioning that such conditions couldn’t last indefinitely. He emphasized the need for caution given the numerous uncertainties, including geopolitical tensions and interest rate fluctuations.

Dimon revealed that the company conducts 100 stress tests per week to prepare for various scenarios, including geopolitical crises and interest rate changes. He stressed that the company aims to serve its clients consistently, regardless of market conditions, by offering better products and services.

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