Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Q3 2006 Earnings Presentation
15 slides from Jp Morgan Chase &'s earnings presentation, Oct 18, 2006
Slide 1: Financial Results Third Quarter 2006
F I N A N C I A L R E S U L T S Third Quarter 2006 O C T O B E R 1 8, 2 0 0 6
Slide 2: 3Q06 Managed Results
3Q06 Managed Results1 ($ in millions) 1 Managed basis presents revenue and credit costs without the effect of credit card securitizations. All references to credit costs refer to managed provision for credit losses. 2 Includes impact related to adoption of SFAS 123R of $104mm in 3Q06 and $106mm in 2
Slide 3: Investment Bank
Net income of $976mm on record third- quarter revenue of $4.7bn, our second highest quarterly revenue ROE of 18% Record IB fees of $1.4bn up 44% YoY driven by record debt underwriting and strong advisory fees Fixed Income Markets down 3% from record 3Q05 and up 16% from prior quarter, including very
Slide 4: Retail Financial Services
Net income of $746mm up 14% YoY Excluding Katrina-related provision of $250mm pre-tax in 3Q05, net income down 8% YoY Results reflect sale of insurance underwriting business in early July 2006 Successfully completed New York Tri-state consumer conversion Completed acquisition of Bank of New York's c
Slide 5: Regional Banking
Regional Banking ($ in millions) 1 Includes Katrina-related provision of $230mm in 3Q05 2 Actual numbers for all periods, not over/under Net income of $744mm up 32% YoY Excluding Katrina-related provision in 3Q05, net income up 5% YoY Results reflect sale of insurance underwriting business in early
Slide 6: Mortgage Banking & Auto Finance
Results reflect improved spreads on lower balances Prior year included loss on loans transferred to held-for-sale and Katrina-related provision Originations of $5.5bn up 8% YoY and 22% QoQ Mortgage Banking & Auto Finance Auto Finance ($ in millions) Note: Results include pre-tax loss on transfer of
Slide 7: Card Services (Managed)
Card Services (Managed) ($ in millions) 1 Includes $200mm increase in allowance for Hurricane Katrina ($100mm) and bankruptcy losses ($100mm) in 3Q05, and $90mm Katrina-related reserve release in 2Q06 2 Actual numbers for all periods, not over/under 3 Adjusted for Paymentech Net income of $711mm up
Slide 8: Commercial Banking
Commercial Banking ($ in millions) 1 Includes Katrina-related provision of $35mm in 3Q05 2 Actual numbers for all periods, not over/under 3 Includes deposits and deposits swept to on-balance sheet liabilities Net income of $231mm down 19% YoY Loans up 11% YoY driven by solid growth across all busine
Slide 9: Treasury & Securities Services
Treasury & Securities Services ($ in millions) Net income of $256mm up 15% YoY Pre-tax margin of 27% Liability balances up 22% YoY; Assets under custody up 23% YoY Revenue up 9% YoY driven by wider spreads on higher liability balances, new business, organic growth and market appreciation Revenue dow
Slide 10: Asset & Wealth Management
Asset & Wealth Management ($ in millions) 1 Includes Katrina-related provision of $3mm in 3Q05 2 Actual numbers for all periods, not over/under 3 3Q06 & 2Q06 do not include the loans and deposits of BrownCo, which were both $3bn at the time of sale on November 30, 2005 Net income of $346mm up 10% Yo
Slide 11: Other Corporate
Other Corporate ($ in millions) Corporate Total Corporate ($ in millions) Treasury ($ in millions) 1 Discontinued operations relate to the sale of select corporate trust businesses, with net income of $65mm in 3Q06, $56mm in 2Q06 and $58mm in 3Q05 2 Actual numbers for all periods, not over/under 3 T
Slide 12: Capital Strength
Capital Strength 1 Estimated for 3Q06 2 There is $6.2bn remaining capacity from the $8bn authorized by the Board in March 2006
Slide 13: 3Q06 Summary Assessment
3Q06 Summary Assessment Continued benefit from favorable credit environment Record IB fees and strong markets results Card Services - ongoing pressure on balances and revenue Retail Financial Services Growth in checking accounts and loans; continued competitive and rate pressures Weak results in Mor
Slide 14: Comments on Outlook
Comments on Outlook Investment Bank IB fee pipeline strong Trading - continue to build out capabilities but results are market-dependent Credit Costs - will increase over time Retail Financial Services - continued modest margin pressure Card Services Continuation of trends will keep pressure on marg
Slide 15: 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