As markets rose and clients clamored to invest more, both with advisors and digitally, JPMorgan Chase’s Asset and Wealth Management unit reported $1.2 billion in net income for the second quarter of 2021 on revenue of $4.1 billion, a record, the bank announced July 13.
The unit, which includes the New York-based bank’s financial advisors as well as its asset-management business, saw quarterly revenue grow 20% year on year “as higher management fees and growth in deposit and loan balances were partially offset by deposit margin compression,” Chief Financial Officer Jeremy Barnum said on a call with banking analysts.
Asset and Wealth Management spent $2.6 billion during the quarter, an 11% year-over-year jump, “driven by higher performance-related compensation and distribution expenses,” Barnum said.
By the numbers:
For the second quarter, the Global Private Bank, which is the bank’s wealth management arm, had revenue of $1.9 billion. The Asset and Wealth Management unit as a whole had a pretax margin of 37%, up from 26% in the second quarter of last year when COVID was sweeping the economy. Assets under management for AWM were $2.98 trillion, up from $2.476 trillion in last year’s quarter.
Physical and digital:
The bank has long been on a push to open more branches with advisors located just steps from the teller windows in a bid to convert more banking customers to financial-advisory clients.
JPMC will have operations in all 48 contiguous states by summer’s end, Barnum said, with 200 of 400 promised new branches currently open. Those new branches have led to $7 billion in deposits and investments, he said.
This “omnichannel strategy continues to deliver,” he said: “Client investment assets were up 36%, driven by market appreciation and positive net flows across our advisor and digital channels.”
Remarks:
Barnum cited the wealth management division’s “exceptional performance” driven by “higher market levels and strong net inflows,” noting that “we're actually outperforming the revenue expectations that were built into our prior expense guidance.
“We saw particularly strong growth in AWM with record long-term flows as well as record revenue,” he said.
