JP Morgan’s securities services growth stalls in second quarter

Results were partially offset by increased client activity, as assets under custody increased by over 5% to $25.5 trillion.

By Joe Parsons

JP Morgan’s securities services business has seen a second consecutive quarterly revenue decline following the release of its latest results, with fee compression dampening returns.

Revenues for the business reached $1 billion in the second quarter, down by 5% year-on-year. The US bank stated this was driven by “deposit margin compression and the impact of a business exit.”

It stated the results were partially offset by increased activity, and assets under custody were also up by over 5% to $25.5 trillion.

It is the second consecutive quarter where revenues for the business have stalled for JP Morgan, in which it also posted $1 billion in revenues for the first quarter, down 4%.

Nevertheless, JP Morgan is one of the most consistent-performing securities services providers in comparison to its larger global custodian rivals, having achieved $1 billion of revenues in nearly every quarter.

Speaking to Global Custodian earlier this year, JP Morgan’s global head of securities services, Teresa Heitsenrether, said this is because it has been focused on satisfying its existing client base.

“This is a business that for fiduciary reasons requires the issuance of periodic RFPs, so you are far more likely to retain a client if they love what you are doing for them. Service delivery has become a differentiator for us, and our retention and client satisfaction levels have never been higher,” said Heitsenrether.

In comparison, Citi has reported an increase of 3% in revenues of $682 million in Q2, largely from higher rates and increased client activity.


BNY Mellon and State Street will announce their results later this week.