JPMorgan Chase & Co.’s asset and wealth management business had a robust third quarter, growing client assets, luring advisors — after shedding them in the first half of the year — and reaching new records for revenue and net income.
Assets under management reached $2.60 trillion by the end of the third quarter, up from $2.51 trillion in the previous quarter and 16% higher year-over-year, according to the company’s third-quarter earnings reports. JPMorgan attributes the increase to “cumulative net inflows into liquidity and long-term products as well as higher market levels.”
And JPMorgan’s client assets reached $3.51 trillion by the end of September, up from $3.37 trillion at the end of June and up from $3.06 trillion at the end of September 2019, the company says.
JPMorgan’s wealth management client advisor ranks expanded during the third quarter after shrinking in the first and second, reaching 2,968 by the end of September, which was a 3% increase from the previous quarter as well as a 3% increase year-over-year, according to the report.
The asset and wealth management unit also generated record quarterly revenue of $3.74 billion in the third quarter of 2020, up 4% form the second quarter and up 5% year-over-year, JPMorgan says. The company attributes the growth predominantly to “higher deposit and loan balances, along with higher management fees and brokerage activity, largely offset by deposit margin compression.”
Net income in the unit also reached a new quarterly record of $877 million, which was 33% higher than in the prior quarter and 31% higher year-over-year, according to the report.
Average loans, meanwhile, were up 13% year-over-year, while average deposits were 23% higher, JPMorgan says.
Furthermore, after large jumps in provisions for credit losses, driven by reserve builds over the first two quarters of the year, the asset and wealth management unit saw a net benefit of $51 million, thanks to reserve release, according to the report.
In July, JPMorgan disclosed that it moved 81 employees from its asset and wealth management division to another business as part of a reorganization, as reported. That brought down employee ranks in the bank’s asset and wealth management unit to 22,949 in the second quarter, from 23,830 in the first quarter, but the move didn’t involve any financial advisors.
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