Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Q2 2005 Earnings Presentation
20 slides from Jp Morgan Chase &'s earnings presentation, Jul 20, 2005
Slide 1: Financial Results Second Quarter 2005
FINANCIAL RESULTS J U L Y 2 0, 2 0 0 5 Second Quarter 2005
Slide 2: Second Quarter 2005 Earnings
Second Quarter 2005 Earnings Investment Bank - weak trading results; strong fees Good momentum in Card Services, Treasury & Securities Services, Consumer & Small Business Banking and Asset & Wealth Management - double-or triple-digit earnings growth Merger saves on track to achieve $2.2bn run-rate b
Slide 3: 2Q05 Earnings - GAAP Comparison Non-Operating Charges (After-Tax)
2Q05 Earnings - GAAP Comparison Non-Operating Charges (After-Tax)
Slide 4: 2Q05 LOB Operating Earnings - GAAP Comparison
2Q05 LOB Operating Earnings - GAAP Comparison
Slide 5: Proforma Discussion
Proforma Discussion The proforma combined historical lines of business information presents the business segments of the company as if these segments had existed as of the earliest date indicated. For further information regarding the proforma combined historical financial information, including rec
Slide 6: 2Q05 Proforma Operating Performance Comparison
2Q05 Proforma Operating Performance Comparison 1 Operating basis excludes merger costs and non-operating litigation charges incurred in 2Q05, 1Q05 and 2Q04 and presents revenues and credit costs without the effect of credit card securitizations. All references to credit costs refer to managed provis
Slide 7: LOB Operating Earnings
LOB Operating Earnings - Proforma Comparison 1 Change from 2Q04 includes the impact of non-core portfolio actions related to the sale of Bank One's brokered home equity portfolio. The pre-tax impact was $74mm, the after-tax impact was $46mm. Excluding the impact of these actions the change versus 2Q
Slide 8: Investment Bank
Earnings down 40% YoY and 54% QoQ due to weak trading results IB fees remain strong Fixed income markets decline driven by weaker results in credit and interest rate markets Equity markets decline include a write-down in trading receivables and losses from a few concentrated client-driven positions
Slide 9: Retail Financial Services - Business Drivers
Retail Financial Services - Business Drivers Good momentum in growth initiatives Significant progress in legacy Chase branches 104 net new branches YoY 475 personal bankers added YoY 412 new ATMs YoY Duane Reade partnership Increase in credit card sales, up 81% YoY Lower mortgage originations YoY dr
Slide 10: Retail Financial Services
Retail Financial Services - Proforma Comparison 1 Change from 2Q04 excludes the impact of non-core portfolio actions related to the sale of Bank One's brokered home equity portfolio 2 Actual numbers for all periods, not over/under Core earnings up 10%1 YoY driven by continued momentum in Consumer &
Slide 11: Card Services (Managed)
Card Services - Proforma Comparison (Managed) 1Actual numbers for all periods, not over/under ROO of 2.56%, up 49bps YoY; earnings up 33% YoY despite litigation charge Revenues increased 3% YoY driven by higher loan balances and higher charge volume Managed margin down 30bps QoQ due to increased bal
Slide 12: Commercial Banking
Commercial Banking - Proforma Comparison 1 Actual numbers for all periods, not over/under 2 Includes deposits and deposits swept to on-balance sheet liabilities Earnings down 26% YoY driven by an increase in provision for credit losses Revenue growth of 4% YoY and 6% QoQ primarily driven by increase
Slide 13: Treasury & Securities Services
Treasury & Securities Services - Proforma Comparison 1 Actual numbers for all periods, not over/under 2 Includes deposits swept to on-balance sheet liabilities 3 Includes an estimated $400 billion of assets under custody from ITS as of 3/31/2005 Revenues up 16% YoY due to spread widening, balance gr
Slide 14: Corporate
Corporate - Proforma Comparison Private equity gains reflect the realization of two large investments Treasury results reflect impact of treasury portfolio repositioning Other Corporate down QoQ as retained expense for tech & ops and staff are offset with merger saves, vendor negotiations and produc
Slide 15: Merger Milestones
Merger Milestones Chase card conversion (31mm accounts) Launch of corporate internet sites (6mm customers) Texas market integration (Estimated timeframe: 3Q05) and Tri-state market integration Lending platforms Deposit systems Check processing Retail channels Completed - 2005 YTD Upcoming 1/05 - Tec
Slide 16: Outlook
Outlook Investment Bank IB fee pipeline: continues to be strong Trading: expect better environment than 2Q Credit portfolio: lower gains from loan workouts and loan sales Credit: returning to normal over time Comp/Rev. ratio: based on current market conditions Retail Financial Services Margin: depos
Slide 17: Disclaimer
Disclaimer This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of JPMorgan Chase's management and are subject to significant risks and uncertainties. Actu
Slide 18: Appendix
APPENDIX JPMorganChase © 49
Slide 19: 2Q05 Operating Results - Heritage JPMC Comparison
2Q05 Operating Results1 - Heritage JPMC Comparison JPMorgan Chase ($mm) Investment Bank ($mm) Retail Financial Services ($mm) Card Services (Managed, $mm) 1 Operating basis excludes merger costs and non-operating litigation charges incurred in 2Q05 and 2Q04 and presents revenues and credit costs wit
Slide 20: 2Q05 Operating Results - Heritage JPMC Comparison
2Q05 Operating Results1 - Heritage JPMC Comparison Commercial Banking ($mm) Treasury & Securities Services ($mm) Asset & Wealth Management ($mm) Corporate ($mm) 1 Operating basis excludes merger costs and non-operating litigation charges incurred in 2Q05 and 2Q04 and presents revenues and credit cos