JPMorgan Earnings Show Debit and Credit Card Sales Volume Up 26%

In the kickoff to earnings season, banking giant JPMorgan Chase posted third-quarter results that bested the Street’s expectations, underpinned by growth in credit card and debit card spending.

Management noted in earnings materials and on the conference call with analysts to discuss results that the continued economic recovery, and consumer confidence, boosted results.

As CEO Jamie Dimon said on the call: “The consumer is in great shape. Capitalism works.”

As has been seen in previous quarters, the company released $2.1 billion of loan reserves, which in turn boosted net income. As a result, earnings of $3.74 a share were leagues better than the consensus of $3 a share.

In terms of other headline numbers, the company said revenues were $30.5 billion, better than the roughly $30 billion the Street had expected.

Supplemental materials and earnings presentation materials released by the company showed that overall credit and debit card sales volume were up 26% year on year to just under $350 billion. But drilling down a bit, we can see that credit card loan growth remained moderate, up a bit more than 1% in the quarter, as measured year over year to $142 billion at period end. Card sales volume in the latest quarter, excluding commercial cards, was $232 billion in the most recent period, up more than 9.7% on a net revenue rate.

On the call with analysts, Chief Financial Officer Jeremy Barnum said it will take “time” for those credit balances to get to the levels seen before the pandemic.

Card net chargeoff rates were 1.4%, down from nearly 3% a year ago.

In a sign of further financial health of the consumer, the company said that the average deposits in its consumer and community banking segment stood at $1 trillion, up 20% year on year.

Active digital customers, the company said in its results, stood at just under 58 million, which was up 6% year on year. Active mobile customers were 44.3 million, having gained 10% on the year.

On the conference call, analysts noted the growth of buy now, pay later (BNPL) within financial services, and management said the space remains one the bank is actively monitoring. Echoing comments made on previous calls about JPMorgan’s appetite for acquisitions — in general — Dimon said that “we will spend whatever we have to spend to compete.”