JP Morgan 1Q17 Earnings Call Notes

Marianne Lake

Loan balances up but have seen a slowdown in C&I growth

“Loan balances of $191 billion were up 12% over the prior year. Consistent with the industry broadly, we have seen a slowdown in C&I growth with our loan balances remaining relatively flat sequentially, although up 8% year-on-year. There are a number of factors likely contributing including potential noise in the data from large acquisitions in prior periods and a resurgence in capital markets activity, particularly in DCM including high yield. So, not to dismiss the importance of the trends, we do need to weigh all the facts and against that other macro indicators remain supportive of the economy broadly including CapEx, data and surveys, as well as very high levels of business optimism, all of which should be supportive of solid demand for credit over time.”

Clients are optimistic despite quieter sequentially

“I mean, we did have 8% growth year-on-year in C&I, we’re just saying sequentially things are a bit quieter and there are whole bunch of reasons that could be driving that. And importantly, you mentioned it, when we are in dialogue with our clients, they are optimistic and they are thinking about growing their businesses and hiring and all of those things are true. And so putting aside those and we have access to capital market for a variety of reasons in newer bank loans. And it’s completely understandable that optimism would lead actions. And so, what that implies, we’ll wait and see but fundamentally a pro-growth series of policies will be constructive to the economy, to our clients and ultimately will end up. And them hiring, spending and they already are, and we’ll see that translate into loan growth. Whether that’s in the second half of this year, we’ll see.”

Jamie Dimon

I wouldn’t overreact to short term loan growth decline

“I wouldn’t overreact to the short term in our loan growth with so many that affect it. When you go to the episodic part, when you look at CIB, I don’t look at loan growth at all because companies have a choice of loans and deals or bonds and like that. Credit card looks okay, mortgage is obviously affected by interest rates, auto is obviously affected by auto sales, and middle market was okay, it was slow but it was okay. So, I wouldn’t react to that. The second thing is, you all should expect as a given that when you have a new president and he gets going that nine months, after the 100 days it’s going to be sausage making period. There will be ups and downs, wins and loss stuff like that. And what you see is a pro-growth agenda, tax infrastructure, regulatory reform and that is a good thing all things being equal. And we think that it should be helpful for Americans. To expect it to be smooth sailing, that would be silly.”