Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Investor Day (February 2020)
52 slides from Jp Morgan Chase &'s investor day presentation, Feb 25, 2020
Slide 1: Consumer & Community Banking
CONSUMER & COMMUNITY BANKING February 25, 2020 FIRM OVERVIEW CORPORATE & INVESTMENT BANK CONSUMER & COMMUNITY BANKING ASSET & WEALTH MANAGEMENT COMMERCIAL BANKING
Slide 2: Agenda
Agenda Page 1 CCB Overview 1 2 Consumer & Business Banking 10 3 Consumer Lending 17 4 Closing Remarks 29 5 Notes 30
Slide 3: We remain focused on a consistent set of strategic priorities
We remain focused on a consistent set of strategic priorities to drive shareholder value now and in the future Acquire, deepen and retain customer relationships by offering compelling value propositions Drive engagement through omni-channel, customer-centered experiences Improve productivity,
Slide 4: We have delivered against our commitments
We have delivered against our commitments We have committed to… …and have delivered on those promises #1 in U.S. card sales volume and #1 in credit card outstandings1 Acquisition and deepening #1 primary bank within Chase footprint2 Entered 16 new markets and added over 90 branches since 2018
Slide 5: Key drivers and performance targets
Key drivers and performance targets ($B, except ratios and where otherwise noted) 2018 2019 YoY ∆ Comments and guidance Households (mm) 61.7 62.6 1% Small businesses1 (mm) 4.0 4.3 8% Active digital customers2 (mm) 49.3 52.4 6% Active mobile customers3 (mm) 33.3 37.3 12% Consumer & Average deposits $
Slide 6: Topline growth was volume-driven, and pricing actions offset secular trends
Topline growth was volume-driven, and pricing actions offset secular trends CCB revenue ($B) $3.3 $0.3 $0.3 $55.9 $52.1 ($0.1) 2018 Volume- and Pricing actions and mix Macro rate¹ Other² 2019 revenue-driven 1 Includes interest rate and prepayment impacts 2 Includes gain/loss on sales, geography-rela
Slide 7: Generated positive operating leverage as volume- and revenue-driven expense drove revenue growth
Generated positive operating leverage as $1.0B of volume- and revenue-driven expense drove $3.3B of revenue growth CCB expense ($B) $1.0 $0.8 $27.8 $28.9 ($0.3) ($0.4) Volume- and revenue- driven expense drove $3.3B revenue growth; represents 1.3ppt overhead ratio reduction 2018 Volume- and Investme
Slide 8: We continue to generate efficiencies in the underlying cost to run the business
We continue to generate efficiencies in the underlying cost to run the business Reduction in cost to serve1 per CCB household Efficiency examples – productivity since 2014 Customer behavior Share of transactions completed through (~14%) self-service channels up >10ppt3 shift (1%) YoY Ops resources >
Slide 9: Our portfolio of investments has yielded strong returns
Our portfolio of investments has yielded strong returns Branch builds are becoming more efficient: Branches and market Legacy markets: branch builds are ~7 months faster to breakeven vs. the 2014 average expansion Expansion markets: trending to have better performance than legacy markets All
Slide 10: Investments in our holistic customer value proposition deliver shareholder value through the cycle
Investments in our holistic customer value proposition deliver shareholder value through the cycle Our customers evaluate us based on a balanced scorecard… … and our value proposition drives retention and resiliency Reasons Consumer Bank prospects consider switching banks: > 95% retention for prim
Slide 11: Strong positions across our businesses, a franchise more valuable than the sum of its parts
We have strong positions across our businesses, and a franchise that is more valuable than the sum of its parts We have unmatched scale and breadth of offerings #1 credit card issuer #1 primary bank #1 business bank #2 mortgage servicer #3 bank auto lender based on U.S. sales and OS1 within Chase fo
Slide 12: Agenda
Agenda Page 1 CCB Overview 1 2 Consumer & Business Banking 10 3 Consumer Lending 17 4 Closing Remarks 29 5 Notes 30
Slide 13: We have made significant progress against our priorities
We have made significant progress against our priorities Our priorities are… …and we have made significant progress against them Increased Consumer Bank deposit & investment balances by over $300B since 20141,2 Acquisition and Grew Business Bank deposit balances by $45B since 20141 deepening G
Slide 14: We're operating from a position of strength in Consumer & Business Banking
We’re operating from a position of strength in Consumer & Business Banking We’re driving strong momentum across key business drivers ($B, except ratios and where otherwise noted) 2019 YoY ∆ 2014 - 2019 CAGR Consumer households (mm) 26.1 3% 3% Consumer Banking Average deposits $543 3% 7% Client inves
Slide 15: We have built a continuum of solutions to meet customer needs across the wealth spectrum
Acquisition and deepening We have built a continuum of solutions to meet customer needs across the wealth spectrum Acquiring new relationships Deepening existing relationships % of Sapphire and Private Client Sapphire and Private Client New checking accounts: Student segment1 households with Card po
Slide 16: We've increased our reach and are building on the strength of our acquisition engine
Acquisition and deepening We’ve increased our reach and are building on the strength of our acquisition engine Digital account opening has helped drive acquisition growth, This shift to digital, combined with improvements to targeting with >2mm accounts opened in 2019 and offers, has helped reduce m
Slide 17: Plans to extend Chase to new markets, with strong early results
Acquisition and deepening We are well underway with our plans to extend Chase to new markets, with strong early results We are continuing to expand our presence into states …and are seeing strong early results with over $1.5B in deposits representing ~95%1 of the U.S. population… & investments Avera
Slide 18: Customers engaging with payments and digital capabilities more often
Engagement Our customers are engaging with our payments and digital capabilities more often, driving continued growth in valuable primary bank relationships We are driving increased payments and digital engagement as cash and …and are well positioned to continue meeting customer needs and growing ch
Slide 19: We continue to reduce cost to serve, while optimizing our branch network
Expenses and simplification We continue to reduce cost to serve, while optimizing our branch network The continued shift to self-service channels has helped reduce ~200mm …enabling us to optimize our network and increase banker capacity to everyday branch transactions since 2014… grow relationships
Slide 20: Agenda
Agenda Page 1 CCB Overview 1 2 Consumer & Business Banking 10 3 Consumer Lending 17 4 Closing Remarks 29 5 Notes 30
Slide 21: Clear set of priorities for our Consumer Lending franchise
We are executing on a clear set of priorities for our Consumer Lending franchise Acquire, deepen and retain customer relationships by offering compelling value propositions Drive engagement through omni-channel, customer-centered experiences Improve productivity, agility, and customer experien
Slide 22: Consumer Lending is an important driver of acquisition and deepening
Acquisition and deepening Consumer Lending is an important driver of acquisition and deepening across the franchise Consumer Lending is a powerful acquisition engine and… …helps us grow and protect our deposit franchise of new-to-Chase households1 came through our of net deposit growth contributed b
Slide 23: Our data assets enable a simplified digital-underwriting experience
Data, analytics and technology Our data assets enable a simplified digital-underwriting experience and drive efficiencies The scale of our data is unparalleled households with a consumer households with customers for whom we annual credit card transactions ~63mm Chase product ~15mm multi-product rel
Slide 24: We are bringing together digital experiences to better engage our customers
Engagement We are bringing together digital experiences to better engage our customers Manage my finances Customer visits Credit …sets a goal to save …gets home value …tracks progress Journey to understand for down payment for information on through a simplified via Goals Based Savings and borrowing
Slide 25: Our Card franchise has an industry leading position in sales and outstanding balances
Card Our Card franchise has an industry leading position in sales and outstanding balances Our strategy is to scale, engage, and deepen We are growing faster than the industry in digital and physical payments Scale: Invest in Engage: Deliver YoY growth in credit card not present sales, product launc
Slide 26: Our top of wallet success is fueled by unique assets and continued innovation
Card Our top of wallet success is fueled by unique assets and continued innovation We have a set of core assets that are unique in the industry… …and we continue to innovate Unmatched scale: #1 in credit card sales volume (23% share)1 Streamlined payments into single interface, making it and #1
Slide 27: Strong revenue trends driven by lending innovation and growth
Card We continue to see strong revenue trends driven by lending innovation and growth Card revenue growth is increasingly driven by lending We are innovating to meet our customers’ borrowing needs Credit Card net revenue1,2 Branded and co-branded product launches and refreshes 4% CAGR New products
Slide 28: High-quality, customer-centric Home Lending business
Home Lending We have a high-quality, customer-centric Home Lending business We are delivering a great customer experience and generating consistent returns Deliver a great Drive productivity Improve quality of Maintain excellent credit experience to win with while reducing servicing portfolio by qua
Slide 29: Investing in our capabilities to win with our core households
Home Lending We are investing in our capabilities to win with our core households We are acquiring and retaining more core3 We have launched digital features across our customers’ home buying and refinancing journeys households higher pull-through rate for Buying power assessment tool (4Q19 pilot)
Slide 30: Targeted approach to improve productivity and reduce costs
Home Lending We are taking a targeted approach to improve productivity and reduce costs We are focused on reducing our origination costs and have seen promising results over the past year We have a proven track record in reducing our servicing expenses Consumer originations1 Consumer sales headcount
Slide 31: Resilient business through prudent risk and balance sheet management
Risk and controls We continue to make our business more resilient through prudent risk and balance sheet management We carefully manage credit risk and optimize firmwide capital and liquidity in balance Our credit risk profile is lower than the industry sheet decisions Chase vs. Industry Share of Ca
Slide 32: Our strategy has produced a strong and successful Consumer Lending business
Our strategy has produced a strong and successful Consumer Lending business Key business drivers ($B, except ratios and where otherwise noted) 2019 YoY ∆ 2014 - 2019 CAGR Active accounts (mm) 43 6% 6% Sales volume1 $763 10% 10% Credit Card Average outstandings $156 7% 5% Net charge-off / (recovery)
Slide 33: Agenda
Agenda Page 1 CCB Overview 1 2 Consumer & Business Banking 10 3 Consumer Lending 17 4 Closing Remarks 29 5 Notes 30
Slide 34: A leading franchise across our businesses and opportunity for further growth
We have a leading franchise across our businesses and opportunity for further growth Strong performance and customer satisfaction across businesses Long-term investment strategy focused on data, digital, and marketing Omni-channel strategy with leading digital capabilities and expanded presenc
Slide 35: Agenda
Agenda Page 1 CCB Overview 1 2 Consumer & Business Banking 10 3 Consumer Lending 17 4 Closing Remarks 29 5 Notes 30
Slide 36: Notes on slide 2 – We have delivered against our commitments
Notes on slide 2 – We have delivered against our commitments 1. Based on 2019 sales volume and loans outstanding disclosures by peers (C, BAC, COF, AXP, DFS) and JPMorgan Chase estimates. Sales volume excludes private label and Commercial Card. AXP reflects the U.S. Consumer segment and JPMorgan Cha
Slide 37: Notes on slide 3 – Key drivers and performance targets
Notes on slide 3 – Key drivers and performance targets 1. Includes Business Banking (deposit and loan/line of credit) and Ink (card; excludes partner and commercial) households. As a result of a change in household methodology in 2019, ~200K partner cards are no longer included 2. Users of all web a
Slide 38: Notes on slide 6 – Efficiencies in the underlying cost to run the business
Notes on slide 6 – We continue to generate efficiencies in the underlying cost to run the business 1. Cost to serve defined as total CCB expense less investments, auto lease depreciation, legal losses, FDIC surcharge, and geography-related impacts. Cost to serve efficiency ratio reflects cost to ser
Slide 39: Notes on slide 7 – Our portfolio of investments has yielded strong returns
Notes on slide 7 – Our portfolio of investments has yielded strong returns 1. ROI defined as 5 year NPV of investment divided by after tax investment. Marketing ROI includes terminal value. ROI of 0 represents a breakeven opportunity 2. Reflects steady-state year 3 performance for Card and year 1 pe
Slide 40: Notes on slide 8 – Customer value proposition
Notes on slide 8 – Investments in our holistic customer value proposition deliver shareholder value through the cycle 1. Novantas 2019 US Shopper Survey. Calculation derived from responses from 5,580 prospective switchers to the following questions: “If you had to find a new financial institution fo
Slide 41: Notes on slide 9 – Strong positions across our businesses
Notes on slide 9 – We have strong positions across our businesses, and a franchise that is more valuable than the sum of its parts 1. Based on 2019 sales volume and loans outstanding disclosures by peers (C, BAC, COF, AXP, DFS) and JPMorgan Chase estimates. Sales volume excludes private label and Co
Slide 42: Notes on slide 10 – Significant progress against our priorities
Notes on slide 10 – We have made significant progress against our priorities 1. Represents average deposit balances 2. Represents end of period investment balances 3. Consumer Bank users of all web and/or mobile platforms who have logged in within the past 90 days 4. Includes households across the f
Slide 43: Notes on slide 11 – Position of strength in Consumer & Business Banking
Notes on slide 11 – We’re operating from a position of strength in Consumer & Business Banking 1. FDIC 2019 Summary of Deposits survey per S&P Global Market Intelligence. Includes a $500mm 10-year exclusion for growth (excluded branches are assumed to include a significant level of commercial deposi
Slide 44: Notes on slide 14 – Extending Chase to new markets
Notes on slide 14 – We are well underway with our plans to extend Chase to new markets, with strong early results 1. 2019 U.S. population sourced from U.S. Census Bureau. Sum of population of states in which Chase currently has or will have a branch presence post-market expansion 2. FDIC 2019 Summar
Slide 45: Notes on slide 18 – Consumer Lending as driver of acquisition and deepening
Notes on slide 18 – Consumer Lending is an important driver of acquisition and deepening across the franchise 1. Customers that had no previous relationship with Chase in prior month. Reflects FY 2019 2. As of December 2019 3. Compares response to Consumer Bank marketing offers from existing Chase C
Slide 46: Notes on slide 19 – Data assets and digital underwriting
Notes on slide 19 – Our data assets enable a simplified digital-underwriting experience and drive efficiencies 1. Reflects customers for whom we have income data from October 2018 - September 2019 2. Transaction total reflects full year 2019 3. Customers are eligible for already approved offers base
Slide 47: Notes on slide 21 – Card franchise position
Notes on slide 21 – Our Card franchise has an industry leading position in sales and outstanding balances 1. Reflects 3Q19 vs. 3Q18. Chase figures and industry benchmark based on Argus data. Data excludes: small business, private label, secured and charge cards as well as select co-brand portfolios.
Slide 48: Notes on slide 22 – Top of wallet success
Notes on slide 22 – Our top of wallet success is fueled by unique assets and continued innovation 1. Represents 2019 share of general purpose credit card (“GPCC”) spend, which excludes private label and Commercial Card. Based on company filings and JPMorgan Chase estimates 2. Represents 2019 share o
Slide 49: Notes on slide 25 – Capabilities to win with core households
Notes on slide 25 – We are investing in our capabilities to win with our core households 1. Chase Home Rewards is a real estate rewards program that matches customers with a real estate agent through the VAST network. Cost savings provided to customers by VAST 2. Metric reflects percentage of Consum
Slide 50: Notes on slide 26 – Improve productivity and reduce costs
Notes on slide 26 – We are taking a targeted approach to improve productivity and reduce costs 1. Field sales formerly referred to as “Retail.” Centralized sales formerly referred to as “Consumer Direct” 2. Field sales coverage includes low to moderate income areas 3. Cost per loan includes all Cons
Slide 51: Notes on slide 27 – Prudent risk and balance sheet management
Notes on slide 27 – We continue to make our business more resilient through prudent risk and balance sheet management 1. Industry benchmark based on Federal Reserve Economic Data – 1Q14 - 3Q19 2. Chase Home Lending delinquencies include impact of PCI loans – 1Q14 - 3Q19 3. Industry delinquency rates
Slide 52: Notes on slide 28 – Strong Consumer Lending business
Notes on slide 28 – Our strategy has produced a strong and successful Consumer Lending business 1. Excludes Commercial Card 2. Excludes rewards liability adjustments. Net revenue rate for Card Services (Credit Card + Merchant Services) of 11.5% in 2019 3. Reflects absolute change from 2014 - 2019 4.