Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Investor Day (February 2014)
197 slides from Jp Morgan Chase &'s investor day presentation, Feb 27, 2014
Slide 1: JPMorgan Chase & Co.
JPMORGAN CHASE & Co. Add tpay Tuesday, February 25, 2014
Slide 2: Forward-looking statements
Forward-looking statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of JPMorgan Chase & Co.’s management and are subject to significant risks an
Slide 3: Firm Overview
February 25, 2014 F I R M O V E R V I E W Marianne Lake, Chief Financial Officer
Slide 4: Agenda
Agenda Page F I R M O V E R V I E W 1 JPMorgan Chase overview 1 New financial architecture 6 Balance sheet/NII and credit update 15 Expense, investments and outlook 21 Appendix – investor topics 27 Appendix – other 32
Slide 5: JPMorgan Chase – extremely strong fundamentals and well positioned to adapt
J P M O R G A N C H A S E O V E R V I E W JPMorgan Chase – extremely strong fundamentals and well positioned to adapt JPMorgan Chase overview Four best-in-class client franchises – each performing strongly Together driving significant synergies – diversification, complete platform, scale and eff
Slide 6: Performance summary
J P M O R G A N C H A S E O V E R V I E W Performance summary JPMorgan Chase overview Note: Totals may not sum due to rounding 1 See note 1 on slide 48 2 See note 2 on slide 48 3 See note 4 on slide 49 4 Estimated impact of final Basel 2.5 Rules and Basel III Advanced NPR reflected in 2012, but not
Slide 7: Client franchise metrics by line of business
J P M O R G A N C H A S E O V E R V I E W CAGR 2013 2010-2013 CBB deposits (Avg) $435 8.4% Client inv. assets (EOP) 189 12.4 Mortgage originations1 166 NM Card sales volume 420 10.3 Auto originations 26 4.3 Merchant processing volume 750 16.9 Loans (EOP) $108 8.6% Client deposits (Avg)2 384 15.6 AUC
Slide 8: Book value per share – growing our fortress balance sheet
$33.45 $36.59 $36.15 $39.88 $43.04 $46.59 $51.27 $53.25 $18.88 $21.96 $22.52 $27.09 $30.18 $33.69 $38.75 $40.81 2006 2007 2008 2009 2010 2011 2012 2013 ($B) 2006 2010 2013 %Δ '06-'13 Tangible common equity $65.4 $118.0 $153.3 134% Basel I Tier 1 common 7.3% 9.8% 10.7% 3.4 Loan loss reserve $7.3 $32.
Slide 9: Agenda
Agenda Section F I R M O V E R V I E W 6 New financial architecture 6 JPMorgan Chase overview 1 Balance sheet/NII and credit update 15 Expense, investments and outlook 21 Appendix – investor topics 27 Appendix – other 32
Slide 10: New financial architecture
N E W F I N A N C I A L A R C H I T E C T U R E New financial architecture Capital requirements Liquidity requirements Other notable requirements B3T1C Advanced approach2 Interim final October 2013 Annual/ongoing Final/proposed1 G-SIB & 50-100 bps buffer Pro-cyclicality of credit and market risk
Slide 11: What to expect in 2014
N E W F I N A N C I A L A R C H I T E C T U R E Estimated 4Q13 2014 Objectives Firm & Bank LCR 2 and NSFR >100% >100% JPM internal 90 day peak & 365 3 day stress >100% >100% Basel III Tier 1 common ratio 9.5% 10%+ Basel III Tier 1 capital ratio 10.2% 11%+/- Firm SLR 5 4.6% 6 5%+ Bank SLR 5,6 4.6% 6
Slide 12: Basel III Supplementary Leverage Ratio
N E W F I N A N C I A L A R C H I T E C T U R E Basel III Supplementary Leverage Ratio (“SLR”) New financial architecture Leverage compliance achievable with minimal client or financial impact Anticipated 2014 leverage actions 1 Derivatives Potential Future Exposure (PFE) model change denotes change
Slide 13: G-SIB and balance sheet optimization
N E W F I N A N C I A L A R C H I T E C T U R E JPM falls within the 2.5% G-SIB bucket G-SIB score is a function of our operating model, including our complete platform, leadership positions and market share, which we believe are a competitive advantage CIB is the main contributor to the Firm’
Slide 14: Operational Risk Capital overview
N E W F I N A N C I A L A R C H I T E C T U R E Operational Risk Capital (“ORC”) Overview New financial architecture JPM operational risk RWA growth from 2010-2013 6% 9% 13% 23% 2010 2011 2012 2013 Non-core estimated ORC Estimated Operational Risk RWA as a % of Total RWA Large losses have a long-ter
Slide 15: Capital simulations
2013 2014 2015 Analysts estimated net income2 ~$23 ~$24 RWA, beginning $1,650 $1,591 $1,550 Models and run-off, net of growth (59) (40) (50) RWA, at year-end $1,591 $1,550 $1,500 Pre-share repurchase B3T1C (%)3 9.5% ≥10.5% ≥11.5% Cumulative excess capital at 10% B3T1C >$10 ~$30 N E W F I N A N C I A
Slide 16: We believe our stock price is attractive
N E W F I N A N C I A L A R C H I T E C T U R E Source: SNL Financial, FactSet, Alacra 1 Cost of equity based on most recent one-month average using Capital Asset Pricing Model (GEM3 historical beta used). TTC ROTCE based on Gordon Growth Model We believe our stock price is attractive – even signifi
Slide 17: Retained common equity by line of business
N E W F I N A N C I A L A R C H I T E C T U R E Retained common equity 2013 Investor Day 2014 Investor Day Pro forma 2013 ROE1 TTC ROE target Basel III Tier 1 Common Total Consumer & Community Banking $46.0 $51.0 21% 20%+ 9.5% Consumer & Business Bank ing 11.0 10.9 26% 30%+ 9.5% Mortgage Bank ing 19
Slide 18: Agenda
Agenda Section F I R M O V E R V I E W 15 Balance sheet/NII and credit update 15 JPMorgan Chase overview 1 New financial architecture 6 Expense, investments and outlook 21 Appendix – investor topics 27 Appendix – other 32
Slide 19: JPMorgan Chase fortress balance sheet
B A L A N C E S H E E T / N I I A N D C R E D I T U P D A T E JPMorgan Chase fortress balance sheet Balance sheet/NII and credit update Assets Liabilities/Equity LTD $268B Note: Totals may not sum due to rounding; for footnoted information, refer to slide 44 ~$900B cash and high quality assets 5
Slide 20: Interest-earning assets and deposit growth
B A L A N C E S H E E T / N I I A N D C R E D I T U P D A T E Total average interest-earning assets ($B) Retail Retail Wholesale Wholesale FY2012 FY2013 Interest-earning assets and deposit growth Balance sheet/NII and credit update Total average deposits ($B) $1,106B $1,189B YoY (%) 10% 6% YoY (%) E
Slide 21: Net interest margin outlook
B A L A N C E S H E E T / N I I A N D C R E D I T U P D A T E The average Firm NIM from 2005-2010 was 2.95% 2013 NIM was 2.23% due to prolonged low rates, legacy loan run-off and liquidity requirements Firm NIM over the next rate cycle could be ~2.65%-2.75% Expect that normalization of rates
Slide 22: Credit quality trends
B A L A N C E S H E E T / N I I A N D C R E D I T U P D A T E Card Card Card Card MB MB MB MB $27.3B $21.9B $16.2B $12.1B LLR, excl. PCI 2010 2011 2012 2013 CCB CIB CB LLR, ex-PCI Credit quality trends Balance sheet/NII and credit update NCOs by line of business ($B) 1 1 1 1 $24B $12B $9B $6B The
Slide 23: Net charge-off trends and estimates
B A L A N C E S H E E T / N I I A N D C R E D I T U P D A T E 2013 NCO rate (%) 4Q13 NCO rates (%) TTC NCO rate (%) MB 1 0.96% 0.57% 0.25%+/- Card 4 3.14 2.86 3.75+/- Auto 0.31 0.39 0.75 Business Banking 5 0.92 1.11 1.00 CIB excl. trade and conduits (0.16) (0.09) 1.00 Trade and conduits (0.01) 0.03
Slide 24: Agenda
Agenda Page F I R M O V E R V I E W 21 Expense, investments and outlook 21 JPMorgan Chase overview 1 New financial architecture 6 Balance sheet/NII and credit update 15 Appendix – investor topics 27 Appendix – other 32
Slide 25: Firmwide expense targets
E X P E N S E , I N V E S T M E N T S A N D O U T L O O K 53.4 57.4 59.7 59.0 1.7 0.7 1.0 6.1 4.8 4.6 10.5 2010 2011 2012 2013 2014E Firmwide expense targets – strong expense discipline Expense, investments and outlook Firmwide adjusted expense ($B); headcount in 000s $64.7B <59.0 1 Excludes FRM 2 A
Slide 26: Business simplification
E X P E N S E , I N V E S T M E N T S A N D O U T L O O K 2014 impact Run-rate impact Revenue $1.5 $2.8 Expense (0.9) (2.3) Pre-tax income 0.6 0.4 Net income $0.3 $0.3 Business simplification Expense, investments and outlook Exiting products non-core to our customers or with outsized operational r
Slide 27: Overview of select investments
E X P E N S E , I N V E S T M E N T S A N D O U T L O O K Overview of select investments Expense, investments and outlook 1 Includes WaMu, as well as out-of-footprint expansion markets 2 Expense for aggregate investments reflects expenses related to select investments with overhead ratios higher tha
Slide 28: Earnings power – simulation
E X P E N S E , I N V E S T M E N T S A N D O U T L O O K Net income build simulation ($B) – 4-5 year horizon CCB excl. MB efficiencies: $0.5B MB in target state: $0.2B 1 2 3 Run-rate Corp. legal exp.4: ($1.0B) Control spend: ($0.6B) Markets reform: ($0.4B) Business simplification: ($0.3B) Leverage
Slide 29: Conclusion
E X P E N S E , I N V E S T M E N T S A N D O U T L O O K Conclusion Four best-in-class client franchises – each performing strongly Together driving significant synergies – diversification, complete platform, scale and efficiencies Demonstrated earnings capacity, resilience and superior retur
Slide 30: Agenda
Agenda Page F I R M O V E R V I E W 27 Appendix – investor topics 27 JPMorgan Chase overview 1 New financial architecture 6 Balance sheet/NII and credit update 15 Expense, investments and outlook 21 Appendix – other 32
Slide 31: Appendix – Investor topics: management team
A P P E N D I X – I N V E S T O R T O P I C S Jamie Dimon Chairman and Chief Executive Officer Daniel Pinto Co-CEO, Corporate & Investment Bank 31 years at JPM 31 in industry Mike Cavanagh Co-CEO, Corporate & Investment Bank 14 years at JPM 26 in industry Gordon Smith CEO, Consumer & Community Banki
Slide 32: Benefits of universal banking model continue to grow
A P P E N D I X – I N V E S T O R T O P I C S ~$3B Benefits of universal banking model continue to grow Appendix – investor topics Other network benefits – branding, funding and earnings diversification Note: Totals may not sum due to rounding 1 Cross-sell revenue counted in both LOBs generating the
Slide 33: JPM efficiency versus best-in-class peers
A P P E N D I X – I N V E S T O R T O P I C S JPMorgan Chase Best-in-class JPM overhead ratio Best-in-class peer1 overhead ratios weighted by JPM revenue mix Peer overhead ratios1 CCB 60% 54% CIB 60% 67% CB 37% 37% AM 71% 70% Overhead ratio (excl. FVA/DVA) 69% 69% JPM efficiency versus best-in-class
Slide 34: Basel III capital and liquidity – JPM well positioned
A P P E N D I X – I N V E S T O R T O P I C S Estimated capital and liquidity metrics Basel III capital and liquidity – JPM well positioned Appendix – investor topics Higher capital and increased liquidity are key foundations of JPM’s fortress balance sheet 1 Include Basel III Tier 1 common equity,
Slide 35: Agenda
Agenda Page F I R M O V E R V I E W 32 Appendix – other 32 JPMorgan Chase overview 1 New financial architecture 6 Balance sheet/NII and credit update 15 Expense, investments and outlook 21 Appendix – investor topics 27
Slide 36: Managed financial results
A P P E N D I X – O T H E R Managed financial results1 Firmwide results ($mm) Net income by lines of business ($mm) 1 See note 1on slide 48 2 See note 4 on slide 49 2011 2012 2013 Consumer & Community Banking $6,105 $10,551 $10,749 Corporate & Investment Banking 7,993 8,406 8,546 Commercial Banking
Slide 37: Consumer & Community Banking
A P P E N D I X – O T H E R Consumer & Community Banking1 1 See note 1 on slide 48 $mm 2011 2012 2013 Net interest income $30,305 $29,071 $28,474 Noninterest revenue 15,314 20,813 17,552 Revenue $45,619 $49,884 $46,026 Expense 27,637 28,827 27,842 Credit costs 7,620 3,774 335 Net income $6,105 $10,5
Slide 38: Consumer & Business Banking
A P P E N D I X – O T H E R Consumer & Community Banking Consumer & Business Banking 1 Includes checking accounts and Chase Liquid® cards beginning in the 2nd quarter of 2012 2 Per compete.com as of December 2013 3 Based on number of loans for SBA fiscal year 2013 (as of September 2013) $mm Leadersh
Slide 39: Mortgage Banking
A P P E N D I X – O T H E R Consumer & Community Banking Mortgage Banking Leadership positions #2 mortgage originator5 #3 retail mortgage originator5 #2 mortgage servicer5 We are working to help homeowners and prevent foreclosures; offered over 1.5mm mortgage modifications and completed ~725
Slide 40: Card, Merchant Services & Auto
A P P E N D I X – O T H E R Consumer & Community Banking Card, Merchant Services & Auto $mm Leadership positions #1 credit card issuer in the U.S. based on loans outstanding3 #1 Global Visa issuer based on consumer and business credit card sales volume4 #1 U.S. co-brand credit card issuer3 #
Slide 41: Corporate & Investment Bank
A P P E N D I X – O T H E R Corporate & Investment Bank1 1 See notes 1 and 5 on slides 48 and 49, respectively 2 Lending revenue includes net interest income, fees, gains or losses on loan sale activity, gains or losses on securities received as part of a loan restructuring, and the risk management
Slide 42: Commercial Banking
A P P E N D I X – O T H E R 1 See note 1 on slide 48 2 Includes deposits, as well as deposits that are swept to on-balance sheet liabilities (e.g., commercial paper, federal funds purchased and securities loaned or sold under repurchase agreements) as part of client cash management programs 3 Repres
Slide 43: Asset Management
A P P E N D I X – O T H E R Asset Management1 1 See note 1 on slide 48 2 Calculated based on average equity 3 See note 6 on slide 49 4 Source: iMoneyNet, 2013 5 Source: Euromoney, 2013 6 Source: Institutional Investor, 2013 7 Source: Pensions & Investments, 2013 8 Source: Absolute Return, 2013 9 Sou
Slide 44: Corporate/Private Equity
A P P E N D I X – O T H E R Corporate/Private Equity1 1 See note 1 on slide 48 2011 2012 2013 Private Equity $391 $292 $285 Treasury and CIO 1,349 (2,093) (676) Other Corporate (821) (221) (5,587) Net income/(loss) $919 ($2,022) ($5,978) ($mm) 41
Slide 45: Notes on slide – Maintain excellent client-based franchises
A P P E N D I X – O T H E R Notes on slide 4 – Maintain excellent client-based franchises 1. CAGR 2010-2013 for mortgage originations was 2% 2. Represents client deposits and other third-party liabilities 3. Represents total CIB trading and Credit Portfolio VaR 4. As of FY2012 5. By both J.D. Power
Slide 46: Notes on slide – New financial architecture
A P P E N D I X – O T H E R Notes on slide 7 – New financial architecture Note: LCR – Liquidity Coverage Ratio; NSFR – Net Stable Funding Ratio; B3T1C – Basel III Tier 1 common CCAR – Comprehensive Capital Analysis Review; SLR – Supplementary Leverage Ratio; OLA – Orderly Liquidity Authority; SPOE –
Slide 47: Notes on slide – JPMorgan Chase fortress balance sheet
A P P E N D I X – O T H E R Notes on slide 16 – JPMorgan Chase fortress balance sheet 1. In addition to eligible cash included in High Quality Liquid Assets (“HQLA”), cash balance includes non-operational deposits with third party banks and float (considered inflows under Basel III Liquidity Coverag
Slide 48: Notes on slide – Interest-earning assets and deposit growth
A P P E N D I X – O T H E R Notes on slide 17 – Interest-earning assets and deposit growth 1. Includes federal funds sold and securities purchased under resale agreements and securities borrowed 2. MB run-off portfolio includes WaMu purchased credit-impaired, discontinued products, broker originated
Slide 49: Notes on slide – Credit quality trends
A P P E N D I X – O T H E R Notes on slide 19 – Credit quality trends 1. Card, Merchant Services & Auto 2. 2012 NPLs are impacted by regulatory guidance issued in the first quarter of 2012 as a result of which the Firm began reporting performing junior liens that are subordinate to nonaccrual senior
Slide 50: Notes on slide – Net charge-off trends and estimates
A P P E N D I X – O T H E R Notes on slide 20 – Net charge-off trends and estimates 1. Represents Real Estate Portfolios (“REP”) only; excludes the impact of purchased credit-impaired loans acquired as part of the WaMu transaction 2. Excludes PCI write-offs of $53mm 3. TTC NCO rate of 0.25%+/- will
Slide 51: Notes on non-GAAP financial measures
A P P E N D I X – O T H E R Notes on non-GAAP financial measures 1. In addition to analyzing the Firm’s results on a reported basis, management reviews the Firm’s results and the results of the lines of business on a “managed” basis, which is a non-GAAP financial measure. The Firm’s definition of ma
Slide 52: Notes on non-GAAP financial measures (cont'd)
A P P E N D I X – O T H E R Notes on non-GAAP financial measures (cont'd) 3. Adjusted expense, a non-GAAP financial measure, excludes firmwide legal expense and expense related to foreclosure-related matters (“FRM”). Where indicated, this definition formerly only excluded Corporate legal expense and
Slide 53: Consumer & Community Banking
February 25, 2014 C O N S U M E R & C O M M U N I T Y B A N K I N G Gordon Smith, Chief Executive Officer Consumer & Community Banking
Slide 54: Agenda
Agenda Page C O N S U M E R & C O M M U N I T Y B A N K I N G 1 Consumer & Community Banking 1 Consumer & Business Banking 17 Mortgage Banking 31 Card Services 48 Appendix 68
Slide 55: CCB franchise has leadership positions across all its businesses
C O N S U M E R & C O M M U N I T Y B A N K I N G The Chase Consumer & Community Banking (“CCB”) franchise has leadership positions across all its businesses FY 2013 ROE: CCB: 23%; Consumer & Business Banking (“CBB”): 26%; Mortgage Banking: 16%; Card, Merchant Services & Auto: 31% Strong financial
Slide 56: The underlying performance of the business is strong
C O N S U M E R & C O M M U N I T Y B A N K I N G The underlying performance of the business is strong $ in billions, except where otherwise noted 2012 2013 YoY ∆ Consumer Banking Households (mm) 21.2 22.3 5% Deposits (average) $320 $354 11% Client investment assets $159 $189 19% Business Banking De
Slide 57: Performance targets
C O N S U M E R & C O M M U N I T Y B A N K I N G Performance targets Consumer & Community Banking 2013 actuals 2013 Investor Day targets Targets Consumer & Business Banking ROE 26% 30% + 30% + Mortgage Banking Net charge-off rate1 0.96% 0.35% +/- 0.25% +/-2 ROE 16% 15% +/- 15% +/-3 Card Services Re
Slide 58: We have exceeded our 2013 targets and are updating 2014 targets
C O N S U M E R & C O M M U N I T Y B A N K I N G We have exceeded our 2013 targets and are updating 2014 targets Mortgage Banking Consumer & Business Banking Card, Merchant Services & Auto 2013 Investor Day targets ~3% expense growth in 2013 3-4K1 headcount reduction by YE 2014 Full year expe
Slide 59: Key expense reduction initiatives across CCB
C O N S U M E R & C O M M U N I T Y B A N K I N G Reduce cost-to-serve through use of digital channels and self-service for transactional needs Automate manual controls and processes Simplify our business through exit of non-core products Further consolidate operating centers Continue opti
Slide 60: Deposit growth has been strong and core loans show continued growth
C O N S U M E R & C O M M U N I T Y B A N K I N G Deposit growth has been strong and core loans show continued growth $364 $383 $414 $453 2010 2011 2012 2013 CCB average deposits ($B) CAGR +8% CCB end of period loans ($B) $112 $117 $117 $119 $52 $53 $53 $61 $48 $47 $50 $53 $13 $14 $16 $16 $230 $194
Slide 61: Customer experience continues to improve
C O N S U M E R & C O M M U N I T Y B A N K I N G Customer experience continues to improve… Net promoter scores1 S e p-1 1 Dec-1 1 M a r- 1 2 Ju n -1 2 S e p -1 2 Dec-1 2 M a r- 1 3 J u n -1 3 S e p -1 3 Dec-1 3 Consumer Banking Business Banking Card Mortgage Originations J.D. Power rankings 42 23 6
Slide 62: Deeper relationships and lower attrition
C O N S U M E R & C O M M U N I T Y B A N K I N G 2010 2011 2012 2013 Source: Chase internal data 1 Includes households with Chase Liquid® cards 2 Reflects accounts that had sales activity during the year; excludes Commercial Card and certain terminated partner portfolios 3 Includes households that
Slide 63: Number of products and services per Consumer Bank household
C O N S U M E R & C O M M U N I T Y B A N K I N G Source: Chase internal data 1 Products and services counted in the Chase cross-sell definition include deposits (interest checking, money market, etc.), credit (mortgage loans, credit cards, etc.), investments, and services (online banking, mobile ba
Slide 64: We are responding to the current environment
C O N S U M E R & C O M M U N I T Y B A N K I N G We are responding to the current environment… Established Controls organization Significant investments to ensure quality Disciplined focus on distinct customer segments Rationalizing the cost structure Continuing to strengthen controls Digital
Slide 65: We can successfully adapt our business to changes
C O N S U M E R & C O M M U N I T Y B A N K I N G … and have proven that we can successfully adapt our business to changes Market changes Response Chase performance (2008 vs. 2013) CARD Act Pricing and fee restrictions Payment allocation Time to make payments Payment processing Pricing r
Slide 66: Customers increasingly using digital channels for self-service
C O N S U M E R & C O M M U N I T Y B A N K I N G Customers are increasingly using digital channels for self-service… 1 Analysis includes Chase Consumer & Business Banking and Card lines of business 2 Digital log-ins includes Online and Mobile Chase servicing interactions per household, indexed to 2
Slide 67: Digital channels have significant cost benefits
C O N S U M E R & C O M M U N I T Y B A N K I N G … which will have significant cost benefits Example: Ultimate Rewards mobile app redemption activity Source: Chase internal data 1 Based on variable cost; call center redemption cost based on average redemption transaction time of ~4 minutes Enable
Slide 68: Leveraging the digital trend to lower cost-to-serve
C O N S U M E R & C O M M U N I T Y B A N K I N G % of deposits through self-service1 % of statements delivered electronically2 We are leveraging the digital trend to lower cost-to-serve Source: Chase internal data 1 Based on Consumer Banking customers 2 Across all CCB Business 3 Based on variable c
Slide 69: Chase branch network of the future
C O N S U M E R & C O M M U N I T Y B A N K I N G The Chase branch network of the future will be more efficient, automated, and consultative Net change in Chase branches over time 2011 2012 2013 2014F 2015F Built out expansion markets where branch density was insufficient Expected change in branch c
Slide 70: Agenda
Agenda Page C O N S U M E R & C O M M U N I T Y B A N K I N G 17 Consumer & Business Banking 17 Consumer & Community Banking 1 Mortgage Banking 31 Card Services 48 Appendix 68
Slide 71: Consumer and Business Banking business drivers
C O N S U M E R & B U S I N E S S B A N K I N G Consumer and Business Banking business drivers 2012 2013 YoY Δ Relationships Consumer household relationships (mm) 21.2 22.3 5% Consumer bank household attrition rate1 11% 10% Business client relationships (mm) 2.2 2.3 2% Business bank client attrition
Slide 72: Customer satisfaction and retention at all time highs
C O N S U M E R & B U S I N E S S B A N K I N G Customer satisfaction and retention are at all time highs Consumer Bank overall satisfaction1 Household attrition (annualized rate)2 Source: Chase internal data Note: Consumer bank only 1 Top 2 box on a 10 point scale, overall satisfaction 2 Adjusted f
Slide 73: Deposit balance growth outperforms the industry
C O N S U M E R & B U S I N E S S B A N K I N G 10.5% 9.5% 6.7% 5.8% 3.5% 2.7% 1.8% 1.4% J P M C B A C C W F C U S B C o m m u n it y S u p e r R e g io n a l R e g io n a l Deposit balance growth remains strong, and outperforms the industry Source: Based on FDIC Summary of Deposits survey per SNL F
Slide 74: Investment balance growth is at record levels
C O N S U M E R & B U S I N E S S B A N K I N G Investment balance growth is at record levels Client investment assets ($B) $138 $159 $189 2011 2012 2013 Net new investments $6 $11 $16 +37% Investments are critical to becoming our customers’ primary bank Growth has been driven by $33B of net new
Slide 75: Investments in the network will drive future growth
C O N S U M E R & B U S I N E S S B A N K I N G Our investments in the network will continue to drive future growth Source: Internal Chase data; SNL Financial Note: Excludes branches for which SNL lacks open date information Branch network age (%) Typical branch consumer household growth Year 10 Bra
Slide 76: Core elements of strategic vision
C O N S U M E R & B U S I N E S S B A N K I N G Core elements of strategic vision Branch footprint Transactions to advice Optimize our branch network Efficiency through innovations Branch staffing models Lower cost- to-serve Become customers’ primary bank Chase Private Client Deepen rela
Slide 77: Build-out in key expansion markets
C O N S U M E R & B U S I N E S S B A N K I N G We have completed our build-out in key expansion markets, resulting in an attractive footprint Source: SNL Financial; Chase internal data 1 JPMC is tied for #1 branch count rank in Riverside 2 Market indicates Core Based Statistical Area Chase branch c
Slide 78: We will continue to optimize our network
C O N S U M E R & B U S I N E S S B A N K I N G We will continue to optimize our network Source: Chase internal data Network activity 2011 2012 2013 Beginning branch count 5,268 5,508 5,614 Network management Total new branches opened 282 179 156 New builds 260 150 132 Relocations 22 29 24 Total bra
Slide 79: Customers are using branches differently
C O N S U M E R & B U S I N E S S B A N K I N G Customers are using branches differently 10% 38% 53% 2007 2010 2013 % of Consumer Bank deposits through self-service channels per quarter2 Source: Chase internal data 1 Data for third quarter 2 Data for fourth quarter; includes ATM / Express Banking Ki
Slide 80: Optimizing how we run our branches
C O N S U M E R & B U S I N E S S B A N K I N G We are optimizing how we run our branches … Traditional branch Branch of the future Branch headcount 9 6 % advisory staff1 40% 60% # Express Banking Kiosks 0 2 # of offices 1 3 Square footage 4,400 2,500-3,500 1 Advisory staff includes Bankers, Busines
Slide 81: Reduced branch staff
C O N S U M E R & B U S I N E S S B A N K I N G … which has enabled us to reduce branch staff 2011 2013 CBB year-end network branch staff1 Source: Chase internal data 1 Includes Tellers (FTE), Bankers, Assistant Branch Managers, Sales & Service Associates, Financial Advisors, and Business Banking Re
Slide 82: Chase Private Client has deepened relationships with affluent customers
C O N S U M E R & B U S I N E S S B A N K I N G Chase Private Client has deepened relationships with our affluent customers Branches offering Chase Private Client 262 2,149 2011 2013 CPC roll-out is largely complete; now offered in 2,000+ branches covering 70% of our affluent clients Clients are
Slide 83: Summary
C O N S U M E R & B U S I N E S S B A N K I N G Summary Strong underlying performance drivers Our branch build-out and Chase Private Client expansion are largely complete and performing well We have an attractive footprint and will continue to optimize our network We are focused on operating
Slide 84: Agenda
Agenda Page C O N S U M E R & C O M M U N I T Y B A N K I N G 31 Mortgage Banking 31 Consumer & Community Banking 1 Consumer & Business Banking 17 Card Services 48 Appendix 68
Slide 85: Mortgage Banking results
M O R T G A G E B A N K I N G 2012 2013 2013 1H13 2H13 Total mortgage origination volume $180.8 $165.5 $101.7 $63.8 Purchase origination volume 44.8 62.5 29.5 33.0 Refinance origination volume 136.0 103.0 72.2 30.8 Third-party mortgage loans serviced (period end) 859.4 815.5 832.0 815.5 Foreclosure
Slide 86: Housing market fundamentals continue to improve
M O R T G A G E B A N K I N G Home price index (HPI) – peak to September 2013 Housing market fundamentals continue to improve Number of underwater homes in the U.S. (mm) Source: CoreLogic; Realtor.org; Chase internal data 1 Seasonally adjusted annualized Months of inventory 30+ day delinquent units
Slide 87: Improving credit performance in Real Estate Portfolios
M O R T G A G E B A N K I N G We continue to see improving credit performance in Real Estate Portfolios Non-credit impaired net charge-offs2 Purchased credit-impaired 30+ day delinquencies 23.3% 21.7% 21.4% 20.7% 20.1% 19.3% 17.9% 16.2% 15.3% 0% 5% 10% 15% 20% 25% $0 $5 $10 $15 $20 4Q11 1Q12 2Q12 3Q
Slide 88: Mortgage market projected to decline 34% in 2014
M O R T G A G E B A N K I N G $0.6 $0.3 $0.4 $0.7 $0.7 $0.9 $1.5 $0.8 $0.4 $1.2 $0.5 $0.3 2012 1H13 2H13 2013 2014F 2015F Market size ($T) $2.1 $1.2 $1.2 Purchase Refinance $1.9 $1.1 $0.8 Note: 2012 through 2013 Inside Mortgage Finance; 2014F - 2015F reflects average of forecasts from Fannie Mae (1/
Slide 89: Significant regulatory and legal complexity exists
M O R T G A G E B A N K I N G Significant regulatory and legal complexity exists Housing Finance Reform FHFA GSE Reform Legislation Federal Housing Admin. Reform New Director, Raise g-fees?, Reduce portfolios?, Common Platform, Single Security? Corker/Warner; Johnson/Crapo, PATH Act More funding req
Slide 90: Committed to being in the mortgage business
M O R T G A G E B A N K I N G Servicing Actively manage down our default inventory Smaller, higher quality servicing book Continue to invest in technology to improve operations Production Simplify our product set and invest in new technology to enhance the customer experience Leverage our
Slide 91: Product and program simplification
M O R T G A G E B A N K I N G Agency Interest Only Fixed / ARM Partnership Rewards Program Non-agency relationship credit program (NARC) Annual Renewal / Draw HELOC 2nd Lien Home Equity Loan Examples of eliminated Products / Programs Product / Program simplification 37 15 12 10 Products /
Slide 92: Chase My New Home mobile app
M O R T G A G E B A N K I N G Mobile app launched in 4Q12 to help customers find and finance a home Critical to capture mortgage customers via mobile / internet 360,000 app downloads to date We will continue to invest in technology to enhance the home financing process for customers Example: C
Slide 93: Strong improvements in customer satisfaction
M O R T G A G E B A N K I N G Provider 2010 Rank 2013 Rank Change Quicken Loans 1 1 - BB&T 6 2 +4 U.S. Bank 4 3 +1 PNC 3 4 -1 Chase 12 5 +7 Wells Fargo 8 6 +2 Citi 13 7 +6 Sun Trust 5 8 -3 Fifth Third 6 9 -3 Provident Funding 10 10 - We have seen strong improvements in customer satisfaction J.D. Pow
Slide 94: Mortgage penetration of Chase Private Client households
M O R T G A G E B A N K I N G Our mortgage penetration of Chase Private Client households continues to improve Strong partnership between the CPC Bankers, Advisors, and Mortgage Bankers Compelling value proposition Closing cost discounts Dedicated processing and underwriting queue Expanded
Slide 95: Real Estate Portfolios outlook
M O R T G A G E B A N K I N G 2010 2011 2012 2013 2014F 2015F Ending Balances ($B) $223 $198 $177 $168 $170 $175 Ongoing ($B) 37 36 36 46 65 85 Legacy ($B) 186 162 141 122 105 90 Net revenue $5,547 $4,592 $4,092 $3,512 $3,000 $2,800 Net charge-offs1 6,450 3,805 3,341 1,107 450+/- 400+/- Change in al
Slide 96: Investing in the future, but next few years challenging
M O R T G A G E B A N K I N G We are investing in the future, but the next few years will be challenging Production expense1 ($B) Given headwinds, anticipate Mortgage Production pretax income to be negative in 2014 Expect 2014 production expense to decline ~30% from 2013 Initiatives to improve
Slide 97: Actively managing down default inventory in Servicing
M O R T G A G E B A N K I N G In Servicing, we are actively managing down our existing default inventory to reduce expense 399 312 167 70 2011 2012 2013 2014F Foreclosure inventory (K) Source: Chase internal data Reduction in default volume and increased efficiencies in core servicing will continu
Slide 98: Core servicing is an attractive business
M O R T G A G E B A N K I N G Core servicing is an attractive business We have competitive advantages in core servicing Funding advantages Mortgage Servicing Rights (“MSR”) risk management expertise Higher barriers to entry due to required compliance and controls infrastructure We will con
Slide 99: Going forward, lower risk and volatility
M O R T G A G E B A N K I N G Going forward, our business will have lower risk and volatility Originations pricing updated to reflect servicing risk resulting in: Lower modeled market share Smaller, higher quality servicing book Less exposure to default servicing Greater percent of loans o
Slide 100: Summary
M O R T G A G E B A N K I N G Build a streamlined and simpler business Actively de-risk the business Rightsize production Strategically invest in technology to create a unique customer experience Summary Production: pretax income to be negative in 2014 Servicing: expect servicing and def
Slide 101: Agenda
Agenda Page C O N S U M E R & C O M M U N I T Y B A N K I N G 48 Card Services 48 Consumer & Community Banking 1 Consumer & Business Banking 17 Mortgage Banking 31 Appendix 68
Slide 102: Chase Card Services is a leading franchise with strong returns
C A R D S E R V I C E S Chase Card Services is a leading franchise that has delivered strong returns Source: Chase internal data 1 Excluding the impact of loan loss reserve release, Card Services ROE would have been 18% in 2012, and 26% in 2013; LLR tax effected at 38% tax rate 2 Excludes Commercial
Slide 103: Focus on spend engagement delivers results
C A R D S E R V I C E S Our focus on spend engagement continues to deliver results Credit card sales volume growth (2013 vs. 2012) Source: Earnings releases, Chase internal data, internal Chase estimates; based on disclosures by peers as of 4Q13 1 U.S. Card 2 Consumer & Small Business estimate 3 Est
Slide 104: Rewards products driving engaged customer relationships
C A R D S E R V I C E S $112 $117 $117 $119 $26 $15 $11 $9 2010 2011 2012 2013 Rewards products driving engaged customer relationships Over 60% growth in rewards outstandings from 2010 to 2013 acquisition vintages Total outstandings on rewards products up 11% from 2010 to 2013 Small Business Car
Slide 105: 2013 vintage outperforming the 2010 vintage
C A R D S E R V I C E S We continue to attract more engaged customers, with the 2013 vintage outperforming the 2010 vintage in both sales and outstandings Source: Chase internal data 1 Excludes Commercial Card and certain terminated partner portfolios 2010 2013 In-year sales by vintage1 In-year outs
Slide 106: Among affluent consumers, ahead of peers
C A R D S E R V I C E S Among affluent consumers, we are ahead of peers in consideration and are more consistently the primary card in wallet Note: For more footnoted information, refer to Appendix 1 Source: Consumer Card Brand Health Tracker; FY 2013 2 Source: Phoenix Global Wealth Monitor 2013 Stu
Slide 107: Healthy efficiency ratio
C A R D S E R V I C E S We maintain a healthy efficiency ratio even with significant investment in marketing; expense declined by 5% in 2013 Source: Earnings releases; Chase internal data 1 Excludes Commercial Card 2 Overhead ratio = total expense / revenue; Total expense includes marketing 3 Amex’s
Slide 108: Net charge-off and delinquency rate trends
C A R D S E R V I C E S Net charge-off and delinquency rate trends Source: Chase internal data Note: Includes held-for-sale loans Delinquency $ roll-rate from current to bucket 2 (0- 60 days past due) Delinquency $ roll-rate from current to charge-off (0- 180 days past due) 0% 2% 4% 6% 8% 10% 12% 1
Slide 109: Core elements of strategic vision
C A R D S E R V I C E S Core elements of strategic vision Continue to build and market Ultimate Rewards and Co-brand partner products Leverage “non-point” value proposition Continue digital innovation Improve customer experience by providing access through preferred channels Drive cost eff
Slide 110: Ultimate Rewards single rewards platform
C A R D S E R V I C E S Since launch of Ultimate Rewards: Percentage of accounts actively spending up 18 percentage points1 Spend on those accounts up 37%1 UltimateRewards.com website customer satisfaction rating of 83 out of 1002 More than 50% of Ultimate Rewards accounts are actively eng
Slide 111: Building on successful rewards products
C A R D S E R V I C E S We will continue to build on our successful rewards products Source: Chase internal data 1 Based on Ultimate Rewards consumer accounts 2 Single redeemer defined as one redemption in prior 24 months; Multi-redeemer defined as more than one redemption in prior 24 months 3 Inclu
Slide 112: Key digital engagement metrics continue to grow
C A R D S E R V I C E S 29% 41% 54% 56% 26% 18% 16% 16% 18% 23% 11% 12% 27% 18% 19% 16% 2010 2011 2012 2013 Our key digital engagement metrics continue to grow rapidly Source: Chase internal data 1 Excludes Commercial Card and certain terminated partner portfolios 2 Other includes primarily point of
Slide 113: ChaseNet platform has been launched
C A R D S E R V I C E S Our proprietary ChaseNet platform has been launched … Merchant Consumer ChaseNet Lead payments innovation Platform launched as planned In pilot mode with select merchants Streamlined operating standards in place System tested and scalable Progress to date 60
Slide 114: Enhanced experience for consumers and merchants
C A R D S E R V I C E S … enabling us to deliver an enhanced experience to consumers and merchants Deliver a new, simple payment option to customers Simplified pricing Lower shopping cart abandonment Reduced fraud leveraging tokenization Deliver targeted merchant offers Merchant “Quick C
Slide 115: Chase Quick Checkout
C A R D S E R V I C E S We will deliver a simplified checkout experience for Chase cardholders and merchants, positioning us to become the preferred digital “way to pay” Chase “Quick Checkout” Auto-fill shipping address, address changes, new card numbers Online / mobile checkout in ~30 seconds v
Slide 116: Bringing merchants and customers together
C A R D S E R V I C E S We are also developing new ways to bring merchants and customers together Compelling offers ChaseNet allows merchants to tailor offers based on customer behaviors and specific purchase history Pay with points Merchant name and logo do not represent an actual business. Lev
Slide 117: Chase Wallet
C A R D S E R V I C E S Chase Wallet will make online and mobile shopping simple Auto-population of all Chase cards With 100mm+ open cards, we can scale very quickly1 Auto-update of Chase cards when lost/stolen/expired Customers won’t have to re-enter card information Allow non-Chase products Open p
Slide 118: Tokenization will reduce fraud
C A R D S E R V I C E S We are also focused on ensuring the safety and security of all transactions Tokenization will reduce fraud Wallet sends token to Merchant 1 Tokenization replaces real account data with a highly secure “token” which is useless when taken out of the secure environment Merchant
Slide 119: Summary
C A R D S E R V I C E S Summary Underlying performance drivers are strong, and we continue to gain market share of general purpose credit card sales volume Credit quality of our portfolio is excellent; credit trends remain positive Tight focus on expense management resulting in a strong effici
Slide 120: CCB franchise has leadership positions across all businesses
C A R D S E R V I C E S The Chase Consumer & Community Banking (“CCB”) franchise has leadership positions across all businesses FY 2013 ROE: CCB: 23%; Consumer & Business Banking (“CBB”): 26%; Mortgage Banking: 16%; Card, Merchant Services & Auto: 31% Strong financial returns Chase Private Clien
Slide 121: Agenda
Agenda Page C O N S U M E R & C O M M U N I T Y B A N K I N G 68 Appendix 68 Consumer & Community Banking 1 Consumer & Business Banking 17 Mortgage Banking 31 Card Services 48
Slide 122: Notes on slides – scope and quality of CCB franchise
A P P E N D I X Notes on slides 2 and 67 – The scope and quality of the Chase Consumer & Community Banking (“CCB”) franchise would be nearly impossible to replicate 1. Based on the American Customer Satisfaction Index 2. Based on disclosures by peers as of 4Q13 3. Per compete.com as of December 2013
Slide 123: Notes on slide – Customer experience continues to improve
A P P E N D I X Notes on slide 8 – Customer experience continues to improve… 1. Source: Chase internal relationship surveys; NPS = % promoters minus % detractors 2. J.D. Power U.S. Retail Banking Satisfaction Study 4/18/13 and 1/1/10; among large bank peers 3. J.D. Power U.S. Small Business Banking
Slide 124: Notes on slide – Among affluent consumers
A P P E N D I X Notes on slide 54 – Among affluent consumers, we are ahead of peers in consideration and are more consistently the primary card in wallet 1. Issuer-level consideration; survey question = “We’d like you to think about the next time you would choose a new credit card. How likely would
Slide 125: Commercial Banking
February 25, 2014 C O M M E R C I A L B A N K I N G Doug Petno, Chief Executive Officer of Commercial Banking
Slide 126: Commercial Banking – a proven business model
C O M M E R C I A L B A N K I N G Commercial Banking A proven business model Platform aligned to best serve client needs JPMC’s leading global capabilities delivered locally – unique competitive advantage Seasoned and experienced team deeply rooted in local communities High quality customer
Slide 127: Agenda
Agenda Page C O M M E R C I A L B A N K I N G 2 Franchise strength 2 2013 performance 10 Outlook 18
Slide 128: Our business – Commercial & Industrial overview
F R A N C H I S E S T R E N G T H Our business Commercial & Industrial overview 26% of CB revenues Larger, mostly public companies with complex needs ~1,600 corporate clients, ~1,100 prospects Served by dedicated industry coverage teams Strong partnership with CIB – more than doubled IB re
Slide 129: Our business – Commercial Real Estate overview
F R A N C H I S E S T R E N G T H Our business Commercial Real Estate overview Commercial Term Lending Real Estate Banking Community Development Banking 17% of CB revenue $49B in loans Stabilized properties Acquired with WaMu in 2008 #1 multifamily lender in U.S.1 8% of CB revenue $19B
Slide 130: Our platform – competitive advantage as part of JPMC
F R A N C H I S E S T R E N G T H Our platform A unique competitive advantage as a part of JPMC Asset Management Private Bank Corporate & Investment Bank Card Mortgage Banking Banking Investor Services Markets Consumer & Business Banking Chase Commercial Banking Investment Management Asset Managemen
Slide 131: Our people and presence
F R A N C H I S E S T R E N G T H Our people and presence Global JPMC capabilities delivered locally CB office or retail branch presence CB banker presence Presence in 119 U.S. cities, 40+ of the top 50 MSAs and 13 major international cities Leverages Chase’s extensive branch network and CIB’s p
Slide 132: Our clients – rigorous client selection
F R A N C H I S E S T R E N G T H Our clients Rigorous client selection Our client selection criteria Long-term, deep relationships: average of ~9 products/client Well-diversified portfolio of clients in our target segments Lower credit, operating and reputational risk We know our clients Resu
Slide 133: Our credit culture and discipline
F R A N C H I S E S T R E N G T H Our credit culture and discipline Through-the-cycle credit costs below our target of 50bps Portfolio quality driven by… 1 Peer averages include CB-equivalent segments or wholesale portfolios at BAC, CMA, FITB, KEY, PNC, USB, WFC 2 Based on end of period loans 3 Thro
Slide 134: Resilient, high quality earnings
F R A N C H I S E S T R E N G T H Our through-the-cycle performance Resilient, high quality earnings $4.1 $4.8 $5.7 $6.0 $6.4 $6.8 $7.0 $1.1 $1.4 $1.3 $2.1 $2.4 $2.6 $2.6 2007 2008 2009 2010 2011 2012 2013 $6.5 $7.3 $8.0 $8.0 $8.0 $9.5 $13.5 17% 20% 16% 26% 30% 28% 19% 2007 2008 2009 2010 2011 2012
Slide 135: Agenda
Agenda Page C O M M E R C I A L B A N K I N G 10 2013 performance 10 Franchise strength 2 Outlook 18
Slide 136: 2013 results
2 0 1 3 P E R F O R M A N C E 2013 results Strong underlying business performance Delivered strong performance Disciplined loan growth Higher deposits, particularly DDA1 Strong credit performance Expense discipline Adapted to regulatory changes Higher capital due to Basel III Higher compli
Slide 137: C&I loan growth
2 0 1 3 P E R F O R M A N C E C&I loan growth Maintaining discipline even when the industry is easing Note: CB’s C&I grouping is internally defined to include certain client segments (MM, which includes Government, Nonprofit & Healthcare Clients, and CCB) and will not align with regulatory definitio
Slide 138: CRE loan growth
2 0 1 3 P E R F O R M A N C E $46 $47 $52 $60 2010 2011 2012 2013 CTL REB CRE loan growth Capturing market opportunity Note: CB’s Commercial Real Estate (CRE) grouping is internally defined to include certain client segments (REB, CTL and CDB) and will not align with regulatory definitions 1 Exclude
Slide 139: Deposit growth
2 0 1 3 P E R F O R M A N C E Deposit growth Stable and diversified deposit base Note: Deposits represent client deposits and other third party liabilities. DDA = Demand Deposit Account 1 Non-operating deposits include deposits in excess of what a client requires to fund their transactional/operatin
Slide 140: Expanding our client base
2 0 1 3 P E R F O R M A N C E Expanding our client base Growth in high potential markets $134 $224 $287 2011 2012 2013 Long-term target Total expansion revenue ($mm) 1,102 1,357 1,467 2011 2012 2013 Total expansion clients Expanded into 5 of the top 15 MSAs Huge growth opportunity – ~16,500 pros
Slide 141: Middle Market expansion success story
2 0 1 3 P E R F O R M A N C E Middle Market expansion success story Florida $85 $530 $1,114 $1,339 2010 2011 2012 2013 Loans ($mm, average) $74 $583 $832 $1,229 2010 2011 2012 2013 Deposits ($mm, average) Revenues ($mm) $3 $22 $36 $44 2010 2011 2012 2013 2009: Entered market Clients: 7 Headcount: 20
Slide 142: Deepening client relationships
2 0 1 3 P E R F O R M A N C E Deepening client relationships Strong cross-sell through our differentiated capabilities Investment Banking Card Services International Revenue ($B)1 Revenue ($mm)1 Revenue ($mm)2 $1.4 $1.6 $1.7 2011 2012 2013 $192 $238 $261 2011 2012 2013 1 Investment Banking and Card
Slide 143: Agenda
Agenda Page C O M M E R C I A L B A N K I N G 18 Outlook 18 Franchise strength 2 2013 performance 10
Slide 144: Market outlook
O U T L O O K Market outlook Well-positioned to absorb near-term challenges and benefit from market opportunities Regulatory changes Low deposit spreads Intense competition Slow economic recovery Near-term, we face some challenges… Strong credit portfolio Regulatory and compliance infras
Slide 145: Business targets
O U T L O O K Business targets Strong through-the-cycle returns Overhead & credit costs 2013 result Long-term target Middle Market expansion Investment Banking1 International2 Key revenue growth initiatives Returns Return on equity Note: TTC = through-the-cycle 1 Investment Banking revenue represent
Slide 146: 2014 priorities
O U T L O O K 2014 priorities Continue to deliver for our clients Deliver for our clients Ensure a fortress compliance and control environment Fully adapt to regulatory capital, liquidity and leverage requirements Maintain risk discipline – monitor market conditions Execute our growth strategy
Slide 147: Asset Management
February 25, 2014 A S S E T M A N A G E M E N T Mary Erdoes, Chief Executive Officer Asset Management
Slide 148: A consistently growing, world-class global client franchise
A S S E T M A N A G E M E N T A consistently growing, sustainable, world-class global client franchise Consistency: predictable, high growth business – revenues, earnings, ROE Breadth: diversified earnings from multiple products, channels, and regions Depth: solid global client-centric franchi
Slide 149: Global Investment Management, AM Solutions and Global Wealth Management
A S S E T M A N A G E M E N T Global Investment Management Consecutive quarters of positive LT flows: Global Funds/Global Institutional Public markets continuum 19 Consecutive quarters of positive LT flows: Multi-asset, thematic portfolios Alternatives and absolute return AM Solutions & Alte
Slide 150: 2013 performance highlights – another record year
A S S E T M A N A G E M E N T 2013 performance highlights – Another record year Record 2006 2013 7-yr CAGR 4/5 star mutual funds (#) 136 241 9% Assets under management ($T) $1.0 $1.6 7% Client assets ($T) $1.3 $2.3 8% Long-term AUM flows ($B) $45 $90 2x Deposits ($B) $52 $146 16% Loans (
Slide 151: Growing revenues, net income and long-term flows
A S S E T M A N A G E M E N T Consistently growing revenues, net income, and long-term flows 6.8 8.6 7.6 8.0 9.0 9.5 9.9 11.3 0 2 4 6 8 10 12 Revenue ($B) 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q1 Q2 Q3 Q4 5 6 0 13 13 19 7 6 12 18 0 7 10 25 20 19 12 11 24 26 16 1 8 16 13 19 10 30 25 19 16 (21)
Slide 152: Continuous investments to fuel future growth
A S S E T M A N A G E M E N T Continuous investments to fuel future growth while strengthening controls Revenue ($B) 03/23/09 8.0 9.9 11.3 14.5 9.4 10.5 12.3 2009 2010 2011 20122012 2013 In 3+ yrs Pretax margin 29% 29% 30-35% 28% New investments P&L ($B) 03/23/09 0.5 0.8 2.2 0.5 0.6 1.0 0.0 2009 201
Slide 153: Industry leading flows
A S S E T M A N A G E M E N T Our industry leading flows demonstrate the continued success of our model (10) (2) 3 7 14 15 18 24 29 30 35 49 55 89 95 DB UBS FII GS TROW IVZ BX BAC BEN MS CS BLK BK Allianz JPM 3 4 5 3 3 3 2 5 7 3 3 AB 3 (43) 5-year average annual LT client asset flows ($B) 3 1 (0)% 1
Slide 154: Consistency of flows from multiple products, channels and regions
A S S E T M A N A G E M E N T Consistency of flows comes from having multiple products, channels, and regions Channel Region LT AUM Flows Fixed Income ~150 Equity ~60 Multi-Asset ~95 Alternatives ~10 Client Asset ~160 GWM ~240 U.S. EMEA Asia LatAm Retail ~185 U.S. EMEA Asia LatAm Institutional ~50 U
Slide 155: Flows come from proven active management
A S S E T M A N A G E M E N T ¹ Equity, Fixed Income, and Solutions represent % of mutual fund AUM in top 2 quartiles vs. Lipper, Morningstar, and Nomura peers; Alternatives/Absolute Return represent % of AUM exceeding benchmark Alternatives/ Absolute Return % of 2013 AUM over peers/benchmark¹ (net
Slide 156: Diversified Fixed Income platform
A S S E T M A N A G E M E N T Diversified Fixed Income platform leads to consistent flows Strong Columbus platform (3-yrs vs. BARC Agg2) Consistent flows¹ NY/London platform turnaround (3-yrs vs. BARC Agg2) Source: Strategic Insight ¹ Global (US, APAC, EMEA) long-term active fixed income mutual fund
Slide 157: Market leading Liquidity business
A S S E T M A N A G E M E N T 2006 Firm AUM ($B) 2013 Firm AUM ($B) 1 Fidelity $271 1 Fidelity $440 2 J.P. Morgan 246 2 J.P. Morgan 381 3 BlackRock 183 3 BlackRock 312 4 Federated 155 4 Federated 240 5 Vanguard 147 5 Goldman Sachs 208 6 BofA Global Capital 138 6 Dreyfus/BK 200 7 Schwab 136 7 Vanguar
Slide 158: Equities a strong growth driver
A S S E T M A N A G E M E N T Equities are a strong growth driver across multiple alpha engines Diversity of investment processes to build multiple sources of alpha Global presence: more than 450 investment professionals in 11 countries across the globe Significant experience and stability, wi
Slide 159: Solutions is a new growth area
A S S E T M A N A G E M E N T 2008 2012 2013 Other Target Date Thematic / Flexible Target Risk Solutions is a new growth area demonstrating strong performance Source: BCG, Morningstar, Strategic Insight 1 Includes ~$6B of client assets for which JPM provides only asset allocation advice 2 Includes t
Slide 160: Leading Alternatives capabilities
A S S E T M A N A G E M E N T Our leading Alternatives capabilities provide diverse exposures to clients Source: Company filings, J.P. Morgan estimates 1 Client assets include non fee-earning client assets (e.g., firm capital invested in its own funds, uncalled capital commitments for funds charging
Slide 161: Global Funds focus
A S S E T M A N A G E M E N T Global Funds focus Source: Strategic Insight Expand footprint: 9% CAGR Salespeople (2009-2013) + + Active LT MF net flows by region in 2013 ($B) Intense focus: 85% of global net flows from Focus funds Strong performance: 80% of 10-year MF AUM in top 2 quartiles 9 10 11
Slide 162: Global Institutional focus
A S S E T M A N A G E M E N T 42 66 95 108 2009 2013 Joined after 2009 Global Institutional focus Upgrading talent yields higher productivity… …facilitating increase in clients… Source: McKinsey, Reuters/Patpatia, Sovereign Wealth Institute Note: Numbers may not tie due to rounding 1 McKinsey Global
Slide 163: GWM is a superior franchise
A S S E T M A N A G E M E N T GWM is a superior franchise Grew front office by ~70% organically (~150% internationally) Increased PB front office efficiency by ~20% (highest efficiency among key peers) Generated industry leading margins globally (29% for 2013) Successful expansion Invaluable b
Slide 164: GWM consistent and diversified growth
A S S E T M A N A G E M E N T GWM demonstrating consistent and diversified growth Diversified GWM revenue growth… ($B) …with total client positions gaining share in all regions ($T) 2013 6.0 2012 5.4 2011 5.1 2010 4.9 2009 4.3 2008 4.2 20071 3.9 20061 3.2 1 Pro forma including JPMS (acquired in 2008
Slide 165: Driving future growth while prudently expanding credit book
A S S E T M A N A G E M E N T (0.09) (0.03) 0.03 0.33 0.20 0.18 0.10 0.06 0.00 0.00 0.00 0.07 0.14 0.17 0.08 0.03 2006 2007 2008 2009 2010 2011 2012 2013 Loans (ex-mortgages) Mortgages Driving future growth through new and existing relationships while prudently expanding our credit book 1 UHNW/HNW c
Slide 166: Peer comparison of revenue and flows
A S S E T M A N A G E M E N T Source: Company filings, J.P. Morgan estimates Note: Allianz, CS, DB, and UBS figures converted at average exchange rate 1 Includes GIM and GWM with CWM reflecting dashed extension. Client asset flows dashed extension reflects CWM net new investments 2 Excludes Asset Ma
Slide 167: Key takeaways and long-term targets
A S S E T M A N A G E M E N T Continued delivery of strong growth and high returns Strong investment performance across broad range of products Continuously investing, especially in international and retail Unique franchise, difficult to replicate, increasing barriers to entry Predictable de
Slide 168: Corporate & Investment Bank
February 25, 2014 C O R P O R A T E & I N V E S T M E N T B A N K Mike Cavanagh, Co-Chief Executive Officer Corporate & Investment Bank Daniel Pinto, Co-Chief Executive Officer Corporate & Investment Bank
Slide 169: Introduction
C O R P O R A T E & I N V E S T M E N T B A N K Introduction Market-leading positions across key business segments #1 in Global IB Fees1; 8.6% share, up from 7.5% in FY2012 Markets revenue share of 10 leading competitors2 16.0% for FY2013, up 140 bps from FY2012; #1 in Fixed Income Markets2 Ma
Slide 170: Agenda
Agenda Page C O R P O R A T E & I N V E S T M E N T B A N K 2 Market-leading performance 2 Client-driven franchise 7 Management priorities 14 Through-the-cycle capital & ROE 24
Slide 171: Stable earnings and best-in-class return on equity
M A R K E T - L E A D I N G P E R F O R M A N C E Stable earnings and best-in-class return on equity 2010 2011 2012 2013 Net revenues1 ($B) 2010 2011 2012 2013 16% 15% 19% 17% 2010 2011 2012 2013 Net income1 ($B) ROE1 (%) 1 Net revenues, net income, ROE, and overhead ratio excluding FVA (effective 4
Slide 172: Market-leading performance by product
M A R K E T - L E A D I N G P E R F O R M A N C E $68.3 $69.9 $68.8 $76.5 2010 2011 2012 2013 1 Industry revenue pool; wallet rank and share per Dealogic; JPM reported revenue shown 2 Revenues of 10 leading competitors, excluding FVA (effective 4Q13 for JPM) and DVA, are a non-GAAP financial measure
Slide 173: Market-leading positions in most products
M A R K E T - L E A D I N G P E R F O R M A N C E Market-leading positions in most products JPM Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 2006 2009 2013 2013 Total leadership positions 7 11 15 8 5 5 5 4 2 2 1 0 Banking (FY2013) 1 Bond underwriting 1 5 1 Loan syndication 2 2 1 EC
Slide 174: Opportunities to improve market share across regions
M A R K E T - L E A D I N G P E R F O R M A N C E Opportunities to improve market share across different regions 3rd Tier 2nd Tier Top 3 JPM select international rankings BANKING (FY2013) 1 Asia EMEA LatAm NA Investment banking fees 5 2 5 1 FIXED INCOME (1H13) 2 Asia EMEA Americas Overall 3 2 1 G10
Slide 175: Agenda
Agenda Page C O R P O R A T E & I N V E S T M E N T B A N K 7 Client-driven franchise 7 Market-leading performance 2 Management priorities 14 Through-the-cycle capital & ROE 24
Slide 176: CIB taps into a broad firmwide client franchise
C L I E N T - D R I V E N F R A N C H I S E Distribution through Private Bank for CIB equity offerings Referrals As part of JPM, CIB taps into a broad firmwide client franchise Consumer & Community Banking Treasury Services products for small business clients Risk management for Chase Mortga
Slide 177: Integrated client coverage model
C L I E N T - D R I V E N F R A N C H I S E Client example CIB scale and completeness has facilitated an integrated client coverage model Client example Client example Advisory, Capital Markets Cu s to d y F u n d S e rv ic e s Investor Services Banking Markets Client Multinational Corporates Corp
Slide 178: Integrated coverage drives deep and broad client relationships
C L I E N T - D R I V E N F R A N C H I S E Integrated coverage with portfolio approach drives deep and broad client relationships 1,184 1,987 1,466 785 771 2,178 1,662 811 1 product 2-4 products 5-9 products 10+ products Increased product penetration (number of clients) +191 +196 2010 2013 2010 201
Slide 179: Long-term macro trends favor global wholesale banks
C L I E N T - D R I V E N F R A N C H I S E Long-term macro trends favor global wholesale banks $29 $72 $28 $42 $17 $26 $73 $139 2013 2023 Global GDP ($T) United States Other Developed Markets (DM) Emerging Markets (EM) +$66 Financial depth (% of GDP)1 Source: McKinsey, Global Insights 1 Financial d
Slide 180: Strong global network to cover clients
C L I E N T - D R I V E N F R A N C H I S E We have a strong global network to cover our clients comprehensively Global reach Revenues ($B)1 $18.5 $11.4 $4.9 $1.3 $36.1 % of Revenues 51% 31% 14% 4% 100% Total employees2 21,472 12,221 17,528 1,029 52,250 Front office ~5,900 ~4,200 ~2,700 ~400 ~13,200
Slide 181: Strong organic growth from international platform
C L I E N T - D R I V E N F R A N C H I S E $17.7 $16.5 $18.3 $18.5 $15.2 $16.1 $17.0 $17.6 $33.0 $32.5 $35.3 $36.1 2010 2011 2012 2013 N. America International JPM revenue by region ($B) Note: Revenues excl. FVA (effective 4Q13) and DVA, are a non-GAAP financial measure *Amounts do not foot due to
Slide 182: Agenda
Agenda Page C O R P O R A T E & I N V E S T M E N T B A N K 14 Management priorities 14 Market-leading performance 2 Client-driven franchise 7 Through-the-cycle capital & ROE 24
Slide 183: 2014 CIB priorities
M A N A G E M E N T P R I O R I T I E S Management priorities 2014 CIB priorities 1 Optimize business mix while investing in core growth opportunities 3 Maintain expense discipline while absorbing increased regulatory and controls costs 2 Adapt to evolving regulatory landscape and market structure c
Slide 184: Optimize business mix: exiting businesses
M A N A G E M E N T P R I O R I T I E S Optimize business mix while investing in core growth opportunities Exiting businesses that are either non-core or no longer fit risk profile Description Optimizing commodities business to better fit banking business model Exiting relationships with select
Slide 185: Continued investment in key businesses
M A N A G E M E N T P R I O R I T I E S Optimize business mix while investing in core growth opportunities Continued investment in key businesses of our core franchise Description EMEA – Completed build of end-to-end operating platform in EMEA, now fully positioned to capture strong growth Asia
Slide 186: Adapt to evolving regulatory landscape and market structure
M A N A G E M E N T P R I O R I T I E S Expected timing by region Adapt to evolving regulatory landscape and market structure changes Impact of global derivatives regulatory changes could be approximately $1B+/- Rates FX Potential impact by business Rates FX Equities CIB Markets revenues = ~$20B Pot
Slide 187: Well diversified business with resiliency
M A N A G E M E N T P R I O R I T I E S Adapt to evolving regulatory landscape and market structure changes Our business is well diversified, with resiliency across macro conditions Client-driven and diversified business model 2010 2013 $33.0 $36.1 IB Fees Treasury Services Fixed Income Markets Equi
Slide 188: Market-making business is flow-driven and client-focused
M A N A G E M E N T P R I O R I T I E S Adapt to evolving regulatory landscape and market structure changes Our market-making business is flow-driven and client-focused $63 $60 $69 $67 $0 $10 $20 $30 $40 $50 $60 $70 $80 2010 2011 2012 2013 Markets volatility ($mm) Markets avg. daily revenue ($mm) Ma
Slide 189: Business model fundamentally compliant with the Volcker rule
M A N A G E M E N T P R I O R I T I E S Adapt to evolving regulatory landscape and market structure changes We believe our business model is fundamentally compliant with the Volcker rule 2 Revenue generation in Markets is driven by client flows Commitment to provide liquidity and deploy capital
Slide 190: Maintain expense discipline
M A N A G E M E N T P R I O R I T I E S Maintain expense discipline Expense discipline across both non-comp and comp have offset increases in regulatory and controls spend 1 Excludes Commodities transaction fees and related expenses; litigation losses included as core expense 2 Regulatory assessment
Slide 191: Market-leading overhead ratio and revenue productivity
M A N A G E M E N T P R I O R I T I E S Maintain expense discipline while absorbing increased regulatory and controls costs Able to maintain both market-leading overhead ratio and high revenue productivity Revenue per headcount2 ($mm/FTE)3 – 3Q13 YTD 3 FY2013 overhead ratio vs. peers (%)1 42% 43% 43
Slide 192: Agenda
Agenda Page C O R P O R A T E & I N V E S T M E N T B A N K 24 Through-the-cycle capital & ROE 24 Market-leading performance 2 Client-driven franchise 7 Management priorities 14
Slide 193: Expected RWA glide path
T H R O U G H - T H E - C Y C L E C A P I T A L & R O E Expected RWA glide path RWA ($B) 2013 TTC Inv Day est. ORC Management Actions 2014 TTC Inv Day est. $565B +$51B -$41B $575B ORC $28 4Q13 $625 Mgmt. Actions $27 ORC $37 4Q12 $615 TTC $575 Expected Model Approvals $39 Mgmt. Actions $39 Allocated
Slide 194: Fortress balance sheet
T H R O U G H - T H E - C Y C L E C A P I T A L & R O E Fortress balance sheet Highlights Highly liquid balance sheet supported by diversified wholesale funding mix and well-distributed term structure Supporting firmwide leverage ratio compliance with non-franchise impacting actions 1 Net of all
Slide 195: Derivatives exposure is client-driven and high quality
T H R O U G H - T H E - C Y C L E C A P I T A L & R O E Our derivatives exposure is client-driven and high quality $130 $66 $51 ($64) ($14) Net derivatives receivable Less cash collateral Derivatives receivable, net of cash collateral Liquid securities and other cash collateral Derivatives receivabl
Slide 196: Through-the-cycle RWA, capital and returns
T H R O U G H - T H E - C Y C L E C A P I T A L & R O E TTC ROE Business Banking TTC RWA TTC Capital1 Outlook for achieving returns $140 $14.7 Higher rate environment for deposits Normalized credit costs Coverage efficiencies Investor Services $75 $7.9 Markets $335 $35.2 Leading businesses,
Slide 197: In summary
T H R O U G H - T H E - C Y C L E C A P I T A L & R O E In summary… Deep client franchise, supported by our scale, completeness and global reach. Fortress balance sheet with strong capital and liquidity position, with earnings power to continue to invest in business Continued headwinds in regu