Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Investor Day (February 2020)
40 slides from Jp Morgan Chase &'s investor day presentation, Feb 25, 2020
Slide 1: Corporate & Investment Bank
CORPORATE & INVESTMENT BANK February 25, 2020 FIRM OVERVIEW CORPORATE & INVESTMENT BANK CONSUMER & COMMUNITY BANKING ASSET & WEALTH MANAGEMENT COMMERCIAL BANKING
Slide 2: Agenda
Agenda Page 1 CIB Overview 1 2 Banking 12 3 Securities Services 21 4 Closing Remarks 28 5 Notes 31
Slide 3: We delivered strong results and record revenues in 2019
ANIMATION We delivered strong results and record revenues in 2019 Adjusted revenue and net income1 ($B) CIB ROE 1 14% 16% 14% 16% 14% Capital ($B) $62 $64 $70 $70 $80 50 30% $38.3 45 $36.4 $35.1 ■ Revenue 1 40 $33.3 $34.6 20% 25% 35 18% 20% 16% 15% 15% 30 ◆ Heritage TSS ROE 15% 15% ▲ Heritage IB ROE
Slide 4: Expenses increased due to higher revenues and additional investments
Expenses increased due to higher revenues and additional investments 2018 to 2019 ($B)1 $0.2 $0.1 $(0.3) $0.4 $21.1 $20.7 In-line with 2019 outlook of ~$21B 2018 Revenue Tech Non-tech Other 2019 Overhead related investments investments 57% 55% ratio1 1 Expense adjusted for legal expense. For footnot
Slide 5: ROE decreased from 15.9% in 2018 to 14.0% in 2019, primarily driven by capital
ROE decreased from 15.9% in 2018 to 14.0% in 2019, primarily driven by capital 1.3% (0.5%) (0.0%) (0.5%) Legal 16.2% (~2%) expense 0.3% 15.9% 14.4% Legal expense 14.0% 0.4% 14.50% 1 2018 Revenue related Rates Expenses Credit cost, Higher capital 2019 tax, & other 1 Includes changes in revenues and r
Slide 6: CIB has a strong track record of gaining market share and establishing leadership globally
CIB has a strong track record of gaining market share and establishing leadership globally Number of businesses ranked 2019 global leadership positions compared to peers1,2,3 ■ #1 ■ #2-3 ■ #4+ 16 7 1 JPM Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Since 2015, we have gained share in each region and across bu
Slide 7: Global Investment Banking grew market share for 4 consecutive years to 9.0%
Global Investment Banking grew market share for 4 consecutive years to 9.0% GIB ■ Industry wallet ($B) ◆ Market share ■ M&A ■ Industry wallet ($B) ◆ Market share ■ 8.3% 8.4% 8.7% 9.2% 8.3% 9.0% 8.6% $24 $25 $26 $29 $26 7.9% 8.1% 7.8% 2015 2016 2017 2018 2019 DCM 8.4% 8.3% 8.7% 7.9% 7.9% $84 $81 $77
Slide 8: Securities Services achieved record mandates and continues to grow fee revenue
Securities Services achieved record mandates and continues to grow fee revenue, offsetting the impact of the challenged rate environment Expanding business with existing clients and winning new mandates… …translating to resilient revenue performance NOT TO SCALE ■ Assets Under Custody ($T) 1 ■ Asset
Slide 9: We have leading positions in our Markets businesses and continue to gain share
We have leading positions in our Markets businesses and continue to gain share Equities1 Global Markets market share (%)1,2 ■ Industry wallet ($B) 2019 vs. 2015 2019 vs. 2018 ◆ Market share 15.0% 11.0% 11.3% JPM +2.5% +0.5% 9.7% 9.9% 8.4% Peer 1 +1.4% +0.3% $68 Peer 2 +0.9% -0.1% $59 $59 $63 $56 0.
Slide 10: Despite increase in capital in our Markets businesses, we have maintained strong returns
Despite increase in capital in our Markets businesses, we have maintained strong returns Impact of capital to ROE, 2015 - 2019 Equities FICC Marginal ROEs above cost of capital across all sub-products ~(300 bps) ~(600 bps) Revenue growth highly accretive ROE % Markets fully-loaded ROE, 2015 - 2019 ~
Slide 11: Our unified Wholesale Payments business delivers full suite of solutions to clients
Our unified Wholesale Payments business delivers full suite of solutions to clients across the firm Our business… Enabling clients to… Supported by… Make and accept payments anytime, …a shared infrastructure: anywhere, via any method Treasury Services Core technology platforms Wholesale Client conne
Slide 12: Treasury Services has experienced significant revenue growth despite rates headwinds
Treasury Services has experienced significant revenue growth despite rates headwinds Firmwide Treasury Services revenue growth1 Firmwide Treasury Services revenue growth relative to peers1,2,3 ■ CIB Treasury Services NOT TO SCALE ■ 2015 - 2019 Treasury Services revenue growth % ■ CB Treasury Service
Slide 13: Wholesale Payments business is well positioned to capture growth opportunities
Wholesale Payments business is well positioned to capture growth opportunities SMBs U.S. Healthcare Corporates E-Commerce Financial Institutions Partnership with InstaMed Global footprint and Unique end-to-end USD clearing and Business Banking Payments and capabilities platform solution
Slide 14: Agenda
Agenda Page 1 CIB Overview 1 2 Banking 12 3 Securities Services 21 4 Closing Remarks 28 5 Notes 31
Slide 15: Select topics for Banking
Select topics for Banking Multi-year performance Continuity in coverage Completeness of coverage Growth opportunities 12
Slide 16: We maintained #1 rank in Global Investment Banking fees and achieved 9.0% market share
We maintained #1 rank in Global Investment Banking fees and achieved 9.0% market share in 2019 - the highest share in a decade ■ Market wallet ($B) ◆ JPM share ◆ Top bank (ex-JPM) ◆ Top 5 banks (ex-JPM)1 315 bps gap 180.0 185 bps gap 200 bps gap 9.0% 9.0% 8.5% 8.6% 160.0 8.0% 8.0% 8.1% 7.8% 7.9% 8.0
Slide 17: We have consistently grown market share faster than peers across regions and products
We have consistently grown market share faster than peers across regions and products, improving our leadership position Equity Loan Bonds North America EMEA APAC LATAM M&A Underwriting Syndication Underwriting #1 #1 #3 #1 #2 #1 #1 #1 for 9 years in since 2014 from #7 in since 2018 since 2010 since
Slide 18: Continuity and completeness in coverage allows us to capture opportunity
Continuity and completeness in coverage allows us to capture opportunity across sectors, regions, and products There is large variation in sector, region, and product wallets year over year Sectors wallet (2015 - 2019) Regional wallet (2015 - 2019) Lowest Year 5 Year Average Highest Year Lowest Year
Slide 19: Continuity and completeness in coverage allows us to capture opportunity
Continuity and completeness in coverage allows us to capture opportunity across sectors, regions, and products There is large variation in sector, region, and product wallets year over year Sectors wallet (2015 - 2019) Regional wallet (2015 - 2019) Lowest Year 5 Year Average Highest Year Lowest Year
Slide 20: Continuity and completeness in coverage across client segments
Continuity and completeness in coverage across client segments Large episodic transactions frequency for clients (2015 - 2019) Wallet composition across fee size (2015 - 2019) % of clients that had a large episodic transaction every % of annual wallet 10% Large episodic 1 - 5 years transactions (>$5
Slide 21: We are targeted with our investments and have gained share selectively
We are targeted with our investments and have gained share selectively 2015 Sectors 2019 Outcomes Targeted investment Targeted 10 sectors… 6 sectors with wallet Improved rank in 5 sectors 25+ sectors $4.5B+ Maintained #1 in 4 sectors 4 sectors with rank 3 or below and wallet $2.5B+ 2015 Co
Slide 22: We see significant opportunities for growth in a changing industry landscape
We see significant opportunities for growth in a changing industry landscape Greater insights to clients, faster Tech and analytics Enhanced banker productivity Improved client experience through digital capabilities Industry Evolution of IPO Rising interest in alternative solutions Trends m
Slide 23: We are investing in relationships, people, and execution, while innovating
We are investing in relationships, people, and execution, while innovating to better serve our clients and fuel our growth Expanding and optimizing our coverage universe Leverage AI/ML to expand capacity Relationships Continuously review priorities Collaborate across all lines of business Rela
Slide 24: Agenda
Agenda Page 1 CIB Overview 1 2 Banking 12 3 Securities Services 21 4 Closing Remarks 28 5 Notes 31
Slide 25: Select topics for Securities Services
Select topics for Securities Services Our growth and performance Perspectives on an evolving industry Positioning our clients and our business for the future 21
Slide 26: Securities Services is a key strategic business for the CIB
Securities Services is a key strategic business for the CIB Our clients... Our businesses… By the numbers… Custody $4.1B revenue2 in 2019 Asset Managers Fund Services #2 Custodian3 with ~$27T in AUC2 SECURITIES SERVICES Liquidity Asset Management & FX 98 markets Owners Lending & Collateral >20,000 d
Slide 27: Driving growth through new business wins, expansion of existing relationships
Driving growth through new business wins, expansion of existing relationships, and investments in new capabilities and markets Growth Areas Assets Under Custody1 ($T) Assets Under Administration NOT TO SCALE Winning industry’s biggest mandates Successfully completed largest transition in the his
Slide 28: Securities Services has delivered strong performance, despite headwinds
Securities Services has delivered strong performance, despite headwinds Strong Performance Revenue1 ($B) Operating Margin1 NOT TO SCALE Growing revenue in a challenged +16% 4.1 environment +7ppts Rate compression offset by fee and 3.6 deposit growth Record fee revenue, up +4% YoY Investments
Slide 29: A changing industry landscape
A changing industry landscape Industry trends…. … are driving client needs for Reduced costs Margin compression Greater efficiencies Expertise and scale to support wider range of asset Increased complexity classes, markets, and investment styles Need for accurate, Shared data environments ti
Slide 30: Securities Services is uniquely positioned to help our clients achieve their goals
Securities Services is uniquely positioned to help our clients achieve their goals Our strategy is centered around three key pillars Investing in technology Leveraging the power of the Delivering efficiencies to our clients with data at the core Corporate & Investment Bank through integrated front-t
Slide 31: Combined with the power of the franchise, Securities Services is well positioned
Combined with the power of the franchise, Securities Services is well positioned for the future Deep front-to-back client relationships Deep Insights into end-to-end client needs Relationships Trusted expertise Unwavering focus on delivery Service Seamless execution at scale Excellence Conti
Slide 32: Agenda
Agenda Page 1 CIB Overview 1 2 Banking 12 3 Securities Services 21 4 Closing Remarks 28 5 Notes 31
Slide 33: Foundational technology improvements designed to enhance productivity and quality of services
Foundational technology improvements designed to enhance productivity and quality of services Deepen and improve investment Modernize our apps & governance infrastructure Continue to optimize our ~$12B tech spend Migrate to fewer, more efficient data centers Reinvest efficiencies and roll-offs
Slide 34: ROE walk: 2019 actuals to medium-term target
ROE walk: 2019 actuals to medium-term target 1.2% (0.3%) ~16% 0.6% Legal 14.4% expense 0.4% 14.0% Revenue ~$40B Overhead ratio 54%+/- Capital $80B 1 2019 Revenue related Investments Structural Medium-term 1 Includes changes in revenues and revenue related expenses Note: Excludes the impact of the Me
Slide 35: We are global, complete, and operate at scale; positioning us well to target growth
We are global, complete, and operate at scale; positioning us well to target growth opportunities Transforming for the future Optimizing our current Increased client breadth and depth model Omni-channel client connectivity Maintaining day-to-day Best-in-class products and services discipline Integra
Slide 36: Agenda
Agenda Page 1 CIB Overview 1 2 Banking 12 3 Securities Services 21 4 Closing Remarks 28 5 Notes 31
Slide 37: Notes on non-GAAP financial measures
Notes on non-GAAP financial measures 1. The CIB provides certain non-GAAP financial measures, which exclude the impact of past business simplification and exit actions, and legal expense on revenue, expense, net income, return on equity (“ROE”), overhead (“OH”) ratio, and Securities Services’ revenu
Slide 38: Notes on slide 4 – CIB has strong track record of gaining market share
Notes on slide 4 – CIB has strong track record of gaining market share and establishing leadership globally 1. Competitor analytics reflects JPMorgan Chase’s share of the global industry revenue pool and is based on JPMorgan Chase’s business structure. Includes co-ranked positions Source: Dealogic
Slide 39: Notes on slide 7 – We have leading positions in our markets businesses
Notes on slide 7 – We have leading positions in our markets businesses, and continue to gain share 1. Source: Coalition, preliminary 2019 market share analysis reflects JPMorgan Chase’s share of the global industry revenue pool and is based on JPMorgan Chase’s business structure. FY19 analysis is ba
Slide 40: Notes on slide 10 – Treasury Services has experienced significant revenue growth
Notes on slide 10 – Treasury Services has experienced significant revenue growth despite rates headwinds 1. Source: Coalition, preliminary 2019 Competitor analysis reflects JPMorgan Chase’s share of the global industry revenue pool and is based on JPMorgan Chase’s business structure. FY19 analysis i