J.P. Morgans net income in the third quarter rose to $5.7 billion compared to $4.3 billion in Q3 2011, which included a 38% rise in net income in its Treasury & Securities Services (TSS) division over the same period.
Worldwide Securities Services (WSS) net revenue increased by $26 million (3% year on year) to $1.0 billion in the quarter. Assets under custody rose to $18.2 trillion from $17.7 trillion in Q2, a record high for the custodian. J.P. Morgan says the rise was due to higher deposit balances.
J.P. Morgan is the third-largest custodian behind BNY Mellon and State Street, according to a recent report from consultancy Celent.
The bank also increased its Tier 1 common ratio in the quarter. We strengthened our fortress balance sheet, ending the third quarter with a strong Basel I Tier 1 common ratio of 10.4%, up from 9.9% in the second quarter, Jamie Dimon, chairman and CEO of J.P. Morgan, said in an earnings statement. We estimate that our Basel III Tier 1 common ratio was approximately 8.4% at the end of the third quarter, up from 7.9% in the second quarter.
In July J.P. Morgan announced a reorganization of a number of business lines, which will see TSS merged with the Investment Bank and Global Corporate Bank divisions. The combined division will be called Corporate & Investment Bank. The restructuring is ongoing.
The bank also launched a new business called Agency Clearing, Collateral and Execution, which combines several of its investment bank derivatives and clearing teams with those providing similar services within WSS. The new head of the business, Emily Portney, previously head of Futures and Options at the Investment Bank, and Dinkar Jetley, CEO of WSS, talked to GC in July about the move.
(CG)