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TheStreet Open House

JPMorgan Chase Reports Fourth-Quarter 2012 Net Income Of $5.7 Billion, Or $1.39 Per Share, On Revenue1 Of $24.4 Billion

Revenue from Private Banking was $1.4 billion, up 19% from the prior year. Revenue from Institutional was $729 million, up 31%. Revenue from Retail was $583 million, up 13%.

Assets under supervision were $2.1 trillion, an increase of $174 billion, or 9%, from the prior year. Assets under management were $1.4 trillion, an increase of $90 billion, or 7%, due to the effect of higher market levels and net inflows to long-term products, partially offset by net outflows from liquidity products . Custody, brokerage, administration and deposit balances were $669 billion, up $84 billion, or 14%, due to the effect of higher market levels and custody and brokerage inflows.

The provision for credit losses was $19 million, compared with $24 million in the prior year.

Noninterest expense was $1.9 billion, an increase of $191 million, or 11%, from the prior year, due to higher performance-based compensation and higher headcount-related 2 expense.

Key Metrics and Business Updates: (All comparisons refer to the prior-year quarter except as noted)

  • Pretax margin 2 was 29%, up from 22% in the prior year.
  • Return on equity was 27% on $7.0 billion of average allocated capital.
  • For the 12 months ended December 31, 2012, assets under management reflected net inflows of $17 billion, driven by net inflows of $60 billion to long-term products and net outflows of $43 billion from liquidity products. For the quarter, net inflows were $32 billion reflecting net inflows of $24 billion to liquidity products and net inflows of $8 billion to long-term products.
  • Net long-term client flows were positive for the fifteenth consecutive quarter.
  • Assets under management ranked in the top two quartiles for investment performance were 76% over 5 years, 74% over 3 years and 67% over 1 year.
  • Customer assets in 4 and 5 Star–rated funds were 47% of all rated mutual fund assets.
  • Record assets under supervision were $2.1 trillion, up 9% from the prior year and 3% from the prior quarter.
  • Record average loans were $76.5 billion, up 40% from the prior year and 7% from the prior quarter.
  • Record end-of-period loans were $80.2 billion, up 39% from the prior year and 7% from the prior quarter.
  • Record average deposits were $133.7 billion, up 10% from the prior year and 5% from the prior quarter.

CORPORATE/PRIVATE EQUITY

 

Results forCorporate/Private Equity($ millions)

        3Q12   4Q11
  4Q12   3Q12   4Q11   $ O/(U)   O/(U) %   $ O/(U)   O/(U) %
Net Revenue   ($140)   $574   $698   ($714)   NM   ($838)   NM
Provision for Credit Losses   (6)   (11)   (10)   5   45   4   40
Noninterest Expense   543   735   914   (192)   (26)   (371)   (41)
Net Income   $498   $217   $233  

$281

  129%   $265   114%

Discussion of Results:

Net income was $498 million, compared with $233 million in the prior year.

Private Equity reported net income of $50 million, compared with a net loss of $89 million in the prior year. Net revenue was $72 million, compared with a loss of $113 million in the prior year, primarily due to lower net valuation losses on both private and public investments and higher gains from sales.

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