JP Morgan Chase 2015 Annual Report Download - page 101

JPMorgan Chase & Co./2015 Annual Report 91
Card, Commerce Solutions & Auto
Selected income statement data
As of or for the year
ended December 31,
(in millions, except ratios) 2015 2014 2013
Revenue
Card income $ 3,769 $ 4,173 $ 4,289
All other income 1,836 993 1,041
Noninterest revenue 5,605 5,166 5,330
Net interest income 13,415 13,150 13,559
Total net revenue 19,020 18,316 18,889
Provision for credit losses 3,495 3,432 2,669
Noninterest expense(a) 8,386 8,176 8,078
Income before income tax
expense 7,139 6,708 8,142
Net income $ 4,430 $ 4,074 $ 4,907
Return on common equity 23% 21% 31%
Overhead ratio 44 45 43
Equity (period-end and
average) $ 18,500 $ 19,000 $15,500
Note: Chase Commerce Solutions, formerly known as Merchant Services,
includes Chase Paymentech, ChaseNet and Chase Offers businesses.
(a) Included operating lease depreciation expense of $1.4 billion, $1.2 billion
and $972 million for the years ended December 31, 2015, 2014 and
2013, respectively.
2015 compared with 2014
Card net income was $4.4 billion, an increase of 9%
compared with the prior year, driven by higher net revenue,
partially offset by higher noninterest expense.
Net revenue was $19.0 billion, an increase of 4% compared
with the prior year. Net interest income was $13.4 billion,
up 2% from the prior year, driven by higher loan balances
and improved credit quality including lower reversals of
interest and fees due to lower net charge-offs in Credit Card
and a reduction in the reserve for uncollectible interest and
fees, partially offset by spread compression. Noninterest
revenue was $5.6 billion, up 8% compared with the prior
year, driven by higher auto lease and card sales volumes,
the impact of non-core portfolio exits in the prior year and a
gain on the investment in Square, Inc. upon its initial public
offering, largely offset by the impact of renegotiated co-
brand partnership agreements and higher amortization of
new account origination costs.
The provision for credit losses was $3.5 billion, an increase
of 2% compared with the prior year, reflecting a lower
reduction in the allowance for loan losses, predominantly
offset by lower net charge-offs. The current-year provision
reflected a $51 million reduction in the allowance for loan
losses, primarily due to runoff in the student loan portfolio.
The prior-year provision included a $554 million reduction
in the allowance for loan losses, primarily related to a
decrease in the asset-specific allowance resulting from
increased granularity of the impairment estimates and
lower balances related to credit card loans modified in
troubled debt restructurings (“TDRs”), runoff in the student
loan portfolio and lower estimated losses in auto loans.
Noninterest expense was $8.4 billion, up 3% from the prior
year, driven by higher auto lease depreciation and higher
marketing expense, partially offset by lower legal expense.
2014 compared with 2013
Card net income was $4.1 billion, a decrease of 17%,
compared with the prior year, predominantly driven by
higher provision for credit losses and lower net revenue.
Net revenue was $18.3 billion, down 3% compared with the
prior year. Net interest income was $13.2 billion, a
decrease of 3% from the prior year, primarily driven by
spread compression in Credit Card and Auto, partially offset
by higher average loan balances. Noninterest revenue was
$5.2 billion, down 3% from the prior year. The decrease
was primarily driven by higher amortization of new account
origination costs and the impact of non-core portfolio exits,
largely offset by higher auto lease income and net
interchange income from higher sales volume.
The provision for credit losses was $3.4 billion, compared
with $2.7 billion in the prior year. The current-year
provision reflected lower net charge-offs and a $554
million reduction in the allowance for loan losses. The
reduction in the allowance for loan losses was primarily
related to a decrease in the asset-specific allowance
resulting from increased granularity of the impairment
estimates and lower balances related to credit card loans
modified in TDRs, runoff in the student loan portfolio, and
lower estimated losses in auto loans. The prior-year
provision included a $1.7 billion reduction in the allowance
for loan losses.
Noninterest expense was $8.2 billion, up 1% from the prior
year, primarily driven by higher auto lease depreciation
expense and higher investment in controls, predominantly
offset by lower intangible amortization and lower
remediation costs.