Jeremy Barnum
Chief Financial Officer at JPMorgan Chase & Co.
Thank you very much. Good morning, everyone. As always the presentation is available on our website and please refer to the disclaimer in the back. Starting on Page 1, the firm reported net income of $9.7 billion, EPS of $3.12 on revenue of $33.5 billion and delivered an ROTCE of 18%. The only significant item this quarter was discretionary net investment securities losses in Corporate of $959 million as a result of repositioning the portfolio by selling US treasuries and mortgages.
Our strong results this quarter reflect the resilience of the franchise in a dynamic environment, touching on a few highlights, we had a record third quarter, we had record third quarter revenue in Markets of $6.8 billion. We ranked number one in retail deposit share based on FDIC data and credit is still healthy, with net charge-offs remaining low. On page 2, we have more detail, revenue of $33.5 billion was up $3.1 billion or 10% year-on-year. Excluding the net investment securities losses, it was up 13%. NII ex markets was up $5.7 billion or 51% driven by higher rates, NIR ex markets was down $3.2 billion or 24% largely driven by lower IB fees and the securities losses and mortgage revenue was up $502 million or 8% year-on-year. Expenses of $19.2 billion were up $2.1 billion or 12% year-on-year, driven by higher structural costs and investments and credit costs of 1.5 billion included net charge-offs of $727 million. The net reserve build of $808 million included a $937 million build in wholesale reflecting loan growth and updates to the firm's macroeconomic scenarios, partially offset by a $150 million release in home lending.
On to balance sheet and capital on Page 3, we ended the quarter with a CET1 ratio of 12.5%, up 30 basis points versus the prior quarter, which was primarily driven by the benefit of net income less distributions, partially offset by the impact of AOCI. RWA was down approximately $23 billion quarter-on-quarter, with growth in lending more than offset by continued active balance sheet management and lower market risk RWA.
Given our results this quarter, we are well positioned to meet our CET1 targets of 12.5% in the fourth quarter and 13% in the first quarter of 2023. These current targets include a 50 basis point buffer over the growing regulatory requirements, which provides flexibility over the coming quarters. To conclude on capital, with the future increases in our risk-based requirements, SLR will no longer be our binding capital constraint, so we announced the call of $5.4 billion and perhaps this quarter and issued $3.5 billion in sub debt to rebalance our capital stack.
Now let's go to our businesses starting on page 4. Before I review CCB's performance, let me provide you with an update on the health of US consumers and small businesses based on our data. Nominal spend still strong across both discretionary and non-discretionary categories with combined debit and credit spend up 13% year-on-year. Cash buffers remain elevated across all income segments. However, with spending growing faster than income, we are seeing a continued decrease in median deposits year-on-year, particularly in the lower income segments. And not surprisingly, small business owners are increasingly focused on the risks and the economic outlook.
Now moving to financial results, this quarter CCB reported net income of $4.3 billion on revenue of $14.3 billion, which was up 14% year-on-year. In Consumer & Business Banking, revenue was up 30% year-on-year, driven by higher NII on higher rates. Deposits were up 10% year-on-year and down 1% quarter-on-quarter. We ranked number one in retail deposit share based on FTSE data, up 60% year- on-year, making us the fastest growing among the top 20 banks and we are now number one in LA in addition to New York and Chicago making us top-ranked in the three largest markets.
Client investment assets were down 10% year-on-year, driven by market performance partially offset by flows. Home lending revenue was down 34% year-on-year on lower production margins and volume. Moving to Card & Auto, revenue was up 9% year-on-year, driven by higher card NII, partially offset by lower auto lease income. Card outstandings were up 18% and revolving balances were up 15% driven by strong net new account originations and growth and revolving balances per account, they still remain slightly below pre-pandemic levels. And in Auto, originations were $7.5 billion, down 35% due to lack of vehicle supply and rising rates.
Expenses of $8 billion were up 11% year-on-year, driven by the investments we're making in technology, travel, marketing and branches. In terms of actual credit performance this quarter, credit costs were $529 million, reflecting net charge-offs of $679 million, which were up $188 million year-on-year, largely driven by loan growth in card, as well as a reserve release of $150 million in home lending. Card delinquencies remained well below pre-pandemic levels though we continue to see gradual normalization.
Next the CIB on Page 5. CIB reported net income of $3.5 billion on revenue of $11.9 billion. Investment banking revenue of $1.7 billion was down 43% year-on-year. IB fees were down 47% versus a strong third quarter last year. We maintained our number one rank with a year-to-date wallet share of 8.1%. In advisory, fees were down 31%, reflecting lower announced activity this year. Underwriting businesses continued to be affected by market volatility resulting in fees down 40% for debt and down 72% for equity. In terms of the fourth quarter outlook, we expect to be down versus a very strong prior-year. And while our existing pipeline is healthy, conversion will of course depend on market conditions. Lending revenue of $323 million was up 32% versus the prior year, driven by higher NII on loan growth.
Moving to Markets, revenue was %6.8 billion, up 8% year-on-year. Fixed income was up 22% as elevated volatility drove strong client activity in the macro franchise, partially offset by a less favorable environment and securitized products. Equity Markets were down 11% against a record third quarter last year. This quarter saw relative strength in derivatives, lower balances in prime and lower cash revenues on lower block activity. Payments revenue was $2 billion, up 22% year-on-year, excluding the net impact of equity investments, it was up 41% and the year-on-year growth was driven by higher rates and growth in fees.
Security Services revenue of $1.1 billion was relatively flat year-on-year. Expenses of $6.6 billion were up 13% year-on-year, largely driven by compensation. Credit costs were $513 million, driven by a net reserve build of $486 million.
Moving to Commercial Banking on Page 6. Commercial Banking reported net income of $946 million. Record revenue of $3 billion was up 21% year-on-year, driven by higher deposit margins, partially offset by lower investment banking revenue. Gross Investment Banking revenue of $761 million was down 43% year-on-year driven by reduced capital markets activity. Expenses of $1.2 billion were up 14% year-on-year. Deposits were down 6% year-on-year and quarter-on-quarter, primarily driven by attrition of non-operating balances, while our core operating balances have shown stability as payment volumes continued to be robust.
Loans were up 13% year-on-year and 4% sequentially. C&I loans were up 7% sequentially, reflecting continued strength in originations and revolver utilization. CRE loans were up 2% sequentially, driven by lower prepayment activity in commercial term lending and real estate banking. Finally, credit costs were $618 million predominantly driven by a net reserve build of $587 million, while net charge-offs remained low.
And then to complete our lines of business, AWM on Page 7. Asset & Wealth Management reported net income of $1.2 billion, with pretax margin of 36%. For the quarter, revenue of $4.5 billion was up 6% year-on-year, predominantly driven by deposits and loans on higher margins and balances, largely offset by reductions in management fees linked to this year's market declines. Expenses of $3 billion were up 10% year-on-year, driven by compensation, including investments in our private banking advisory teams, technology and asset management initiatives. For the quarter, net long-term inflows were $12 billion across fixed income, equities and alternatives. AUM of $2.6 trillion and overall client assets of $3.8 trillion were down 13% and 7% year-on-year respectively, driven by lower market levels, partially offset by continued net inflows. And finally, loans were flat quarter-on-quarter, while deposits were down 6% sequentially, driven by migration to investments, partially offset by client flows.
Turning to Corporate on Page 8. Corporate reported a net loss of $294 million. Revenue was a net loss of $302 million compared to a net loss of $1.3 billion last year. NII was $792 million, up $1.8 billion year-on-year, driven by the impact of higher rates. NIR was a loss of $1.1 billion, down $852 million, primarily due to the securities losses I mentioned upfront. And expenses of $305 million were higher by $125 million year-on-year.
The outlook on Page 9. Going forward, we will also provide guidance for total firm-wide NII. For the fourth quarter, we expect it to be approximately $19 billion, implying full year 2022 NII of approximately $66 billion. And we expect NII ex-markets for the fourth quarter to also be about $19 billion, implying that we expect markets NII to be around zero, which brings the full year to about $61.5 billion. While we're not giving 2023 NII guidance today, you will recall that at Investor Day, we talked about a fourth quarter 2022 NII ex-markets run rate of $66 billion, with potential upside for the full year 2023. Today's guidance for the fourth quarter of this year implies an approximate run rate of $76 billion. And from this much higher level, we would now expect some modest decline for the full year 2023. In addition, there's quite a bit of uncertainty surrounding the trajectory of key drivers, including rates, deposit reprice and loan growth. So, keep both of those things in mind as you update the 2023 estimates in your models. Moving to expenses. Our outlook remains unchanged and as it relates to the card net charge-off rate, we now expect the full year rate to be approximately 1.5%, below our previous expectations.
So to wrap up, we are happy with the strong diversified performance of the quarter as we continue to navigate an environment of elevated uncertainty.
With that, I will turn it over to Jamie for some additional remarks.
