Jeremy Barnum
Chief Financial Officer at JPMorgan Chase & Co.
Thanks, operator, and good morning, everyone. 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 $8.3 billion, EPS of $2.63 on revenue of $31.6 billion and delivered an ROTCE of 16%. These results include approximately $900 million of credit reserve builds, which I'll cover in more detail shortly, as well as $500 million of losses in credit adjustments and other in CIB. Regarding loan growth, we're continuing to see positive trends with loans up 8% year-on-year and 1% quarter-on-quarter ex-PPP with the sequential growth driven by continued pickup in demand in our wholesale businesses including ongoing strength in AWM.
On Page 2, we have some more detail on our results. Revenue of $31.6 billion was down $1.5 billion or 5% year-on-year. NII ex-Markets was up $1 billion or 9% on balance sheet growth and higher rates, partially offset by lower NII from PPP loans. NIR ex-markets was down $2.2 billion or 17% predominantly driven by lower IB fees, lower home lending production revenue, losses and credit adjustments and other in CIB as well as investment securities losses and corporate. And markets revenue was down $300 million or 3% against a record first quarter last year.
Expenses of $19.2 billion were up approximately $500 million or 2% predominantly on higher investments and structural expenses largely offset by lower volume and revenue-related expenses. Credit costs were $1.5 billion for the quarter. We've built $902 million in reserves, driven by increasing the probability of downside risks due to high inflation and the war in Ukraine as well as builds for Russia-associated exposures in CIB and AWM. Net charge-offs of $582 million were down year-on-year and comparable to last quarter and remain historically low across our portfolios.
Onto balance sheet and capital on Page 3. Our CET1 ratio ended at 11.9%, down 120 basis points from the prior quarter. As a reminder, we exited the fourth quarter with an elevated buffer to absorb anticipated changes this quarter, the largest being SA-CCR adoption as well as some pickup in seasonal activity. In addition to those anticipated items, there were a couple of other drivers. The rate sell-off led to AOCI drawdowns in our AFS portfolio, but keep in mind, all else equal, these mark-to-market losses creep back to capital through time and as securities mature, and price increases across commodities resulted in higher counterparty credit and market risk RWA. While of course, the environment is uncertain, many of these effects are now in the rearview mirror, and as a result, we believe that our current capital and future earnings profile position us well to continue supporting business growth while meeting increasing capital requirements as we look ahead.
With that, let's go to our businesses, starting with Consumer and Community Banking on Page 4. CCB reported net income of $2.9 billion on revenue of $12.2 billion, which was down 2% year-on-year. In Consumer and Business Banking, revenue was up 8% predominantly driven by growth in deposit balances and client investment assets, partially offset by deposit margin compression. Deposits were up 18% year-on-year and 4% quarter-on-quarter, consistent with last quarter, and client investment assets were up 9% year-on-year, largely driven by flows in addition to market performance.
In Home Lending, revenue was down 20% year-on-year on lower production revenue from both lower margins and volumes against a very strong quarter last year, largely offset by higher net servicing revenue. Originations of $24.7 billion declined 37% with the rise in rates. And as a result, mortgage loans were down 3%.
Moving to Card and Auto, revenue was down 8% year-on-year primarily on strong new card account originations leading to higher acquisition costs. Card outstandings were up 11% and revolving balances have continued to grow, ending the quarter above the first quarter of '21 levels. And in Auto, originations were $8.4 billion, down 25% due to the lack of vehicle supply while loans were up 3%.
Touching on consumer spend, combined credit and debit spend was up 21% year-on-year with growth stronger and credit as we see a continued pickup in travel and dining. And as the quarter progressed, we saw robust reacceleration of T&E spend, up 64%. Expenses of $7.7 billion were up 7% year-on-year, driven by higher investments and structural expenses, partially offset by lower volume and revenue-related expenses.
Next, the CIB on Page 5. CIB reported net income of $4.4 billion on revenue of $13.5 billion for the first quarter. Investment banking revenue of $2.1 billion was down 28% versus the prior year. IB fees were down 31% year-on-year. We maintained our number one rank with a wallet share of 8%. In Advisory, fees were up 18% and it was the best first quarter ever benefiting from the closing of deals announced in 2021. Debt underwriting fees were down 20% primarily driven by leverage finance as issuers contended with market volatility. And in equity underwriting, fees were down 76% on lower issuance activity, particularly in North America and EMEA.
Moving to Markets, total revenue was $8.8 billion, down 3% against a record first quarter last year. Fixed income was relatively flat, driven by a decline in securitized products where rising rates have slowed down the pace of mortgage production, largely offset by growth in currencies in emerging markets and commodities on elevated client activity in a volatile market. Equity markets were down 7% against an all-time record quarter last year. This quarter however was our second best with robust client activity across both derivatives and cash, and Prime continued to perform well with client balances hovering around all-time highs.
Credit adjustments and other was a loss of $524 million driven by funding spread widening as well as credit valuation adjustments relating to both increases in commodities exposures and markdowns of derivatives receivables from Russia-associated counterparties. We take a second here to address the widely reported situation in the nickel market as it relates to our results this quarter. We were hedging positions for clients closely linked to nickel producers who generally sell forward a portion of the coming years production. The extreme price movements created margin calls which we and other banks are helping to address. Because this is counterparty related, not trading, it appears in the credit adjustments and other line, where it contributed about $120 million to the reported loss I just mentioned. It also drove approximately half of the increase in market risk RWA, as I noted on the capital slide, and was a driver of higher reported VaR which will also be elevated in our upcoming filings.
Payments revenue was $1.9 billion, up 33% year-on-year or up 9% excluding net gains on equity investments, driven by continued growth in fees, deposit balances and higher rates. Security services revenue of $1.1 billion was up 2% year-on-year, driven by higher rates and growth in fees. Expenses of $7.3 billion were up 3% year-on-year mostly due to higher structural expenses and investments largely offset by lower volume and revenue-related expenses.
Moving to Commercial Banking on Page 6. Commercial Banking reported net income of $850 million and an ROE of 13%. Revenue of $2.4 billion was flat year-on-year with higher payments revenue and deposit balances offset by lower investment banking revenue. Gross Investment Banking revenue of $729 million was down 35% driven by both fewer large deals and less flow activity. Expenses of $1.1 billion were up 17% year-on-year, largely driven by investments and volume and revenue-related expenses. Deposits were down 2% quarter-on-quarter as client balances are seasonally highest at year-end.
Loans were up 5% year-on-year and up 3% quarter-on-quarter excluding PPP. C&I loans were up 3% sequentially ex-PPP reflecting higher revolver utilization and originations across middle market and corporate client banking. CRE loans were up 3% driven by strong loan originations and funding across the portfolio.
And then to complete our lines of business, AWM on Page 7. Asset and Wealth Management reported net income of $1 billion with a pretax margin of 30%. Revenue of $4.3 billion was up 6% year-on-year as growth in deposits and loans and higher management fees and performance fees and alternative investments were partially offset by deposit margin compression and the absence of investment valuation gains from the prior year. Expenses of $2.9 billion were up 11% year-on-year predominantly driven by higher structural expenses and investments as well as higher volume and revenue-related expenses.
For the quarter, net long-term inflows of $19 billion were positive across all channels with strength in equities, multi-asset and alternatives. And in liquidity, we saw net outflows of $52 billion. AUM of $3 trillion and overall client assets of $4.1 trillion, up 4% and 8% year-on-year respectively were driven by strong net inflows. And finally, loans were up 3% quarter-on-quarter with continued strength in mortgages and securities based lending while deposits were up 9%.
Turning to Corporate on Page 8. Corporate reported a net loss of $856 million. Revenue was a loss of $881 million, down $408 million year-on-year. NII was up $319 million due to the impact of higher rates, and NIR was down $727 million due to losses on legacy equity investments versus gains last year as well as approximately $400 million of net realized losses on investment securities this quarter. Expenses of $184 million were lower by $692 million year-on-year primarily due to the contribution to the firm's foundation in the prior year.
Next, the outlook on Page 9. We still expect NII ex-Markets to be in excess of $53 billion and adjusted expenses to be approximately $77 billion, and we'll update these and give you more color at Investor Day next month.
So to wrap up, once again this quarter, the company's performance was strong in a particularly volatile and challenging environment. We helped our clients navigate very difficult markets, provided support to relief efforts and implemented economic sanctions of unprecedented complexity with multiple directives from governments around the world. And of course, our thoughts remain with everyone, including our employees affected by Russia's invasion of Ukraine. Looking ahead, the U.S. economy remains robust. We're watching high inflation, the reversal of QE and rising rates as well as the ongoing effects of the war on the global economy.
With that, operator, please open the line for Q&A.
