JP Morgan AUM drops 7.3% in tumultuous quarter
JP Morgan Chase & Co.’s asset and wealth management division reported assets under management of $2.74 trillion as of June 30, down 7.3% from the end of the first quarter and 8.2% year-on-year.
In its earnings presentation, JP Morgan said the year-over-year decline in assets under management was “primarily due to lower market levels, partially offset by continued long-term net inflows.”
By asset type, net inflows into equities and alternative products last quarter totaled $9 billion and $1 billion, respectively, while fixed income and multi-asset products saw outflows. net losses of $1 billion and $3 billion, respectively, according to a supplement accompanying the earnings release. .
In addition, “market performance and other impacts” contributed to a $223 billion decline in assets under management last quarter, according to the earnings supplement.
Net outflows were $4 billion for fixed income in the second quarter of 2021. Equities, multi-asset and alternative products saw net inflows of $20 billion, $3 billion and $6 billion, respectively, in the prior year quarter.
Additionally, the asset and wealth management unit reported net income of $1 billion in the second quarter, roughly flat from the first quarter, but down 13.1% from the second. quarter of the prior year, according to the earnings release.
Net revenue for the asset management unit totaled $4.31 billion in the second quarter, roughly flat with the first quarter and a 4.8% increase from the second quarter of the year former.
The year-over-year increase in net income was “primarily due to growth in deposits and loans on higher balances and spreads, partially offset by investment valuation losses versus gains in the previous year and lower performance fees,” JP Morgan said in the Liberation.
The asset management unit’s non-interest expense was $2.92 billion in the second quarter, up 2.1% from the first quarter and 12.9% from in the second quarter of 2021. the business, including compensation, and higher volume and revenue-related expenses, including distribution costs,” according to the release.
Additionally, on a conference call with analysts on Thursday, JP Morgan Chairman and CEO Jamie Dimon commented on the likelihood of a recession. “The consumer is in great shape right now,” he said. “So even if we go into a recession, they come into this recession with less leverage in much better shape than in 2008 and 2009 and in much better shape than in 2020.”
He added: “And jobs are plentiful. Now of course jobs can go. Things happen. But they’re in great shape. And obviously when you have recessions it affects income and credit at the consumption.”