J.P. Morgan Increases AuC by 7 Percent

Assets under custody in (AuC) at J.P. Morgan grew 7% from last year to $18.9 trillion, while AuC fell 2% from last quarter.

Growth was recorded by Markets & Investor Services ($6.7 billion, up 7%); Securities Services ($1.1 billion, up 1%); and Fixed Income and Equity Markets combined ($5.4 billion, up 18% due to client revenue and improved performance in credit-related and equities products). Treasury Services revenue fell to $1.1 billion, down 2% compared with the prior year, driven by lower trade finance spreads. Lending revenue increased, primarily reflecting net interest income on retained loans and fees on lending-related commitments.

Overall, J.P. Morgan reported a net income of $6.5 billion for the second quarter of 2013, compared with net income of $5.0 billion in the second quarter of 2012.

International revenue increased to $4.8 billion, representing 48% of total revenue excluding debit valuation adjustments (DVA). Return on equity (ROE) was 20% on $56.5 billion of average allocated capital.

The Corporate & Investment Bank (CIB) division reported a net income of $2.8 billion, up 19% compared with the prior year. The growth is primarily driven higher net revenue ($9.9 billion, up from $9.0 billion last year), partially offset by higher non-interest expense ($5.7 billion, up 8% from the prior year).

The revenue increases include a $355 million gain from DVAs on structured notes and derivative liabilities; the prior year included a gain from DVA of $755 million. Excluding the impact of DVA, net income was $2.6 billion, up 37% from the prior year, and net revenue was $9.5 billion, up 16% from the prior yea