JPMorgan’s retail-focused sub-segment declined in the 4Q



JPMorgan’s second largest sub-segment

In the Consumer & Community Banking segment, the Card, Merchant & Auto sub-segment provides credit card, merchant payment systems, and auto loans to a wide variety of clients. It’s largely driven by retail clients. This is a big sub-segment for JPMorgan Chase & Co. (JPM).

Through this sub-segment, JPMorgan is also able to reach a large part of the market. JPMorgan is able to reach out to customers that don’t have a long association with the bank.

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This sub-segment is the second largest sub-segment in JPMorgan’s Consumer & Community Banking segment. JPMorgan is very strong in this sub-segment. Wells Fargo (WFC) and Citibank (C) are way behind JPMorgan. Only Bank of America (BAC) is able to provide tough competition to JPMorgan in this sub-segment. All of these banks are part of the Financial Select Sector SPDR (XLF).

Segment’s results were mild 

In this sub-segment, JPMorgan’s net revenue was $4.5 billion. This was a modest decline of 4%—compared to the same quarter in 2013. This was mainly due to JPMorgan exiting a few non-core products. Out of the total net revenue, the net interest income was $3.4 billion. This was an increase of nearly 2%—compared to the same quarter last year. Non-interest revenue was $1.1 billion. This was a decline of nearly 20%—compared to the same quarter last year. This sharp fall was driven by exits from some products in the portfolio.

On the bottom line, JPMorgan’s net income was $980 billion in the fourth quarter. This was a fall of 7%—compared to the same quarter in 2013. As a result, this sub-segment was the highest profit-earning sub-segment in the Consumer & Community Banking segment. It was also a sub-segment with high return. It had a return on equity of 20% on an allocated average capital of $19 billion.


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