JPMorgan’s latest results, released Friday (July 12), showed that consumers continued to use their cards in full force, for both debit and credit payments.
And though there are pockets of weakness in spending from lower income cohorts, according to management, spending trends are still strong — and there remain opportunities to grow presence in the card market.
The second-quarter results and supplementals from the company indicated that credit card loans were up 13% year on year to $216 billion, up 5% from the first quarter.
Debit and credit card sales volumes were up 7%, to $453 billion in the most recent period.
Drilling down a bit, credit spending, in terms of sales volumes, were 8% higher vs. last year, to $316.6 billion, which represented a 9% surge from the first quarter.
There was a 7% gain in active mobile customers to 55.6 million. Active digital customers, overall, were 5% higher through the same timeframe, to 69 million.
During the conference call with analysts, JPMorgan CFO Jeremy Barnum said there’s been little impact from spending shifts in an inflationary environment. (CEO Jamie Dimon was absent from the call due to an overseas “travel conflict” mentioned on the call.)
The net charge-off rate on card loans, per company data, stood at 3.5% in the second quarter, up from 3.3% in the first quarter and 2.4% from a year ago. Average deposits, overall, were down 1% quarter over quarter and down 7% year on year to just over $1 trillion as holders, said Barnum, rotated into higher yielding accounts.
Barnum said that credit performance was “predominantly driven by card as newer vintages season and credit normalization continues.”
With a nod to the commercial lending environment, Barnum observed that “demand for new loans remains muted as middle market and large corporate clients remain somewhat cautious due to the economic environment.”
Amid questions about loan demand, Barnum noted that “our card business is, of course, no way capital constrained. So, whatever growth makes sense there in terms of our customer franchise or ability to acquire accounts and retain accounts, and what fits inside our credit risk appetite, is growth that’s going to make sense.”
Asked on the call about credit performance, Barnum said that “when it comes to card charge offs and delinquencies, there’s not much to see there — it’s normalization, not deterioration. It’s in line with expectations.”
As has been consistent with commentary in bank earnings from earlier this year — noting pressures for specific customer cohorts — Barnum said that there’s “behavior that consistent with a little bit of weakness in the lower income” client base.
There has been a rotation from discretionary spending to discretionary categories, though the impact has been “subtle … it all kind of hangs together, in what is, sometimes, actually not a very interesting story.”
PYMNTS Intelligence data has noted that, among the lower income demographics — those making less than $50,000 annually — and in reference to that non-discretionary spending, paying for food (25%), housing (37%) and their monthly bills (13%) now accounts for 72% of their monthly income.
Shares of JPMorgan were 2% lower at the start of trading Friday.
“The currency of now” takes on a decidedly different form in this poem about the mall’s resurgence. It celebrates the brick-and-mortar comeback fueled by Gen Z’s desire for IRL (in real life) connections and the evolving role of physical space in a digitally-driven world. Join us, with a little help from AI, as we examine this retail revolution, where the “currency” of cool reigns supreme.
The tinsel’s gone, the carols now hushed,
New Year’s returns — cashiers mildly crushed.
A sea of sweatpants, gift cards in hand,
The mall’s a vibe unplanned.
But fear not, dear shopper, the story’s not bleak —
The mall’s plotting comebacks, not just peak weak week.
Gen Z’s in the food court, TikTokking their fries,
While swiping through Depop for vintage thigh-highs.
“IRL’s better!” they might say, “No porch pirates, no wait—
Just tag me @Aritzia, I’ll meet you at eight!”
They crave neon selfies, not screens’ pixelated glow,
So malls built a skatepark where a Sears used to go.
Shopify’s merchants now hawk leather and lace
In pop-ups by Simon — no “online-only” space.
Leap powers the kiosks, the QR code deals,
As D2C brands test if foot traffic feels.
Where Macy’s once stood, now micro-lofts bloom:
“Live above Lululemon!” they might chirp. “Bath bombs in every room!”
A dentist, a daycare, a co-working hub —
The mall’s now a Swiss Army knife, scrubbed of ’80s dud.
Mall of America’s got waterslides looping its floors,
While American Dream’s got a ski slope indoors.
“Why choose between Zara and ziplines?” they could grin,
As Nordstrom becomes Saks Fifth within.
Phones glow like fireflies in this retail ballet:
Price checks on Google, then “U up?” on Tinder (hey).
They scan, they compare, they Instagram the ‘fit—
But still buy the jeans ’cause the vibe’s so legit.
So here’s to the mall — that phoenix of bricks!
No longer a relic of cassette tape tricks.
With Gen Z as hypebeast and Shopify’s might,
It’s part TikTok backdrop, part urbanist’s right.
The future’s bright, chaotic, a bit over-leased …
But hey — at least parking’s finally decreased.