Driven by lower provision for credit losses, partially offset by lower net revenue, JPMorgan Chase & Co.’s Card Services unit generated net income of $1.34 billion for the first quarter ended March 30; it reported a $303 million loss during the same period last year, the New York-based issuer reported April 13.
Net revenue was down 10.6%, to $3.98 billion from $4.45 billion. Net interest income was $3.2 billion, down 13.3% from $3.69 billion, primarily because of lower average loan balances, the impact of legislative changes and a decreased level of fees, Chase noted in its earnings release. These decreases largely were offset by lower revenue reversals associated with lower charge-offs, Chase said.
End-of-period loans were $128.8 billion, down 13.7% from $149.3 billion a year earlier. Average loans were $132.5 billion, down 15% from $155.8 billion. In both cases, the reductions “were consistent with expected portfolio runoff,” Chase said.
The provision for credit losses was $226 million, down 93.5% from $3.5 billion, reflecting lower net charge-offs and a reduction of $2 billion to the allowance for loan losses caused by lower estimated losses. The prior-year provision included a reduction of $1 billion to the allowance for loan losses, Chase said.
Noninterest revenue was $782 million, up 3.2% from $758 million, driven by the transfer of the Commercial Card business to Card Services from Treasury & Securities Services during the quarter and higher net interchange income, partially offset by lower revenue from fee-based products, Chase said.
Excluding the Commercial Card portfolio, sales volume was $77.5 billion, up 11.7% from $69.4 billion. Merchant-processing volume was $125.7 billion on 5.6 billion total transactions processed, according to Chase.
