Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Q3 2013 Earnings Presentation
28 slides from Jp Morgan Chase &'s earnings presentation, Oct 11, 2013
Slide 1: Financial Results 3Q13
FINANCIAL RESULTS 3Q13 October 11, 2013
Slide 2: 3Q13 Financial highlights
3Q13 Financial highlights 3Q13 net loss of $0.4B; EPS of ($0.17); revenue of $23.9B1 3Q13 net income of $5.8B2, or $1.42 per share2, excluding significant items Continue to seek fair and reasonable settlement with the government on mortgage-related matters 3Q13 results included the following
Slide 3: Firmwide litigation reserves
Firmwide litigation reserves Firmwide litigation reserves – 2010 through 3Q131 (pretax, $B) Reserves for litigation – beginning balance (1/1/10) ~$3 2 Add: Net increases to reserves ~28 Less: Settlements and judgments (~8) Reserves reflect what is probable Reserves for litigation – ending balance (9
Slide 4: 3Q13 Financial results
3Q13 Financial results1 $mm, excluding EPS $ O/(U) 3Q13 2Q13 3Q12 Revenue (FTE)1 $23,880 ($2,078) ($1,983) Credit costs (543) (590) (2,332) Expense 23,626 7,760 8,255 Reported net income/(loss) ($380) ($6,876) ($6,088) Net income/(loss) applicable to common stockholders ($650) ($6,751) ($5,996) Repo
Slide 5: Fortress balance sheet and returns
Fortress balance sheet and returns $B, except where noted 3Q13 2Q13 3Q12 Basel I Tier 1 common capital1,2 $145 $147 $135 Risk-weighted assets 2 1,376 1,410 1,297 Tier 1 common ratio 1,2 10.5% 10.4% 10.4% Basel III Tier 1 common capital2 $146 $148 ― Risk-weighted assets 2 1,564 1,587 ― Tier 1 common
Slide 6: Consumer & Community Banking
Consumer & Community Banking1 $mm Leadership positions $ O/(U) Consumer & Business Banking 3Q13 2Q13 3Q12 #1 in deposit growth for the second year in a row, with growth rate Net interest income $7,121 $27 ($174) more than twice the industry average3 Noninterest revenue 3,961 (960) (1,464) #1 in
Slide 7: Consumer & Community Banking: Consumer & Business Banking
Consumer & Community Banking Consumer & Business Banking $mm Financial performance $ O/(U) Net income of $762mm, down 2% YoY, but up 9% QoQ 3Q13 2Q13 3Q12 Net revenue of $4.4B, up 2% YoY and 3% QoQ Net interest income $2,684 $70 $19 Noninterest revenue 1,746 73 89 Expense up 5% YoY and flat Qo
Slide 8: Consumer & Community Banking: Mortgage Banking
Consumer & Community Banking Mortgage Banking $mm Financial performance $ O/(U) Mortgage Production pretax income of $90mm, down 3Q13 2Q13 3Q12 $997mm YoY, reflecting lower volumes and lower margins, Mortgage Production partially offset by lower repurchase losses Production-related revenue, excl.
Slide 9: Consumer & Community Banking: Card, Merchant Services & Auto
Consumer & Community Banking Card, Merchant Services & Auto $mm Financial performance $ O/(U) Net income of $1.2B, up 29% YoY 3Q13 2Q13 3Q12 Net income, excluding the reduction in the allowance for Revenue $4,632 ($38) ($91) loan losses,3 up 11% YoY Expense 1,917 (71) (3) Revenue of $4.6B, dow
Slide 10: Corporate & Investment Bank
Corporate & Investment Bank1 $mm Financial performance $ O/(U) Net income of $2.2B on revenue of $8.2B 3Q13 2Q13 3Q12 DVA loss of $397mm Corporate & Investment Bank revenue $8,189 ($1,687) ($171) ROE of 16%; 17% excl. DVA Investment banking fees 1,510 (207) 81 Treasury Services 1,053 2 (11)
Slide 11: Corporate & Investment Bank – Key metrics & leadership positions
Corporate & Investment Bank – Key metrics & leadership positions Corporate & Investment Bank Comments ($B) LTM1 FY2012 FY2011 FY2010 Corporate & Investment Bank International revenue $17.3 $16.3 $17.1 $15.7 48% of revenue is international for LTM 3Q13 International deposits (Avg)2 203.3 189.6 180.
Slide 12: Commercial Banking
Commercial Banking1 $mm Net income of $665mm, down 4% YoY and up 7% QoQ $ O/(U) Revenue of $1.7B, flat YoY 3Q13 2Q13 3Q12 Revenue $1,725 ($3) ($7) EOP loan balances up 9% YoY and 3% QoQ4 2 Middle Market Banking 745 (32) (3) Middle Market loans up 7% YoY4 2 Corporate Client Banking 459 15 (1)
Slide 13: Asset Management
Asset Management1 $mm Net income of $476mm, up 7% YoY $ O/(U) Revenue of $2.8B, up 12% YoY 3Q13 2Q13 3Q12 Revenue $2,763 $38 $304 AUM of $1.5T, up 12% YoY Private Banking 1,488 5 123 Institutional 553 (35) (10) AUM net inflows for the quarter of $32B, driven by net Retail 722 68 191 inflows
Slide 14: Corporate/Private Equity
Corporate/Private Equity1 $mm Private Equity $ O/(U) Private Equity net income was $242mm, primarily due to net valuation gains on private investments 3Q13 2Q13 3Q12 Private Equity portfolio of $8.7B Private Equity $242 $30 $331 Treasury and CIO Treasury and CIO (193) 236 (562) Treasury and CI
Slide 15: Outlook
Outlook Consumer & Community Banking Firmwide guidance Mortgage Banking Expect NII to be approximately flat in the near term Total quarterly net charge-offs expected to be Expect FY2013 firmwide adjusted expense1 of $59.5-$60B $200mm+/- in 4Q13, if current trends continue If charge-offs an
Slide 16: Simplifying and de-risking our business
Simplifying and de-risking our business Investments in control – significant Simplifying our business resources committed Implications for future of the business Exiting products non-core to our Control agenda Increased cost of control and compliance customers or with outsized operational #1
Slide 17: Agenda
Agenda Page Appendix 16 FINANCIAL RESULTS 16
Slide 18: Core net interest margin
Core net interest margin1 Net interest income trend Core NII Market-based NII Core NIM Market-based NIM JPM NIM 3.67% 3.29% 3.10% 3.00% 2.92% 2.85% 2.83% 2.60% 2.60% 3.06% 2.74% 2.61% 2.47% 2.43% 2.40% 2.37% 2.20% 2.18% 1.51% 1.41% 1.29% 1.17% 1.07% 1.11% 1.14% 1.05% 0.89% FY2010 2 FY2011 2 1Q12 2Q1
Slide 19: Consumer credit – Delinquency trends
Consumer credit – Delinquency trends1 Home equity delinquency trend ($mm) Prime mortgage delinquency trend ($mm) $3,500 30 – 149 day delinquencies 150+ day delinquencies $4,000 30 – 149 day delinquencies 150+ day delinquencies $3,000 $3,000 $2,500 $2,000 $2,000 $1,500 $1,000 $1,000 $500 $0 $0 Dec-09
Slide 20: Card Services
Card Services As disclosed on September 9, 2013 (not updated) Credit update Credit card: 0-30 $ roll rate1 TDR portfolio and NCO rates 4.0% 0-24 TDR 25-36 TDR 37+ TDR 22.0% Total NCO rate 12.1% 3.5% $10.9B $0.3B / 3% $0.6B / 5% NCO rate 0-24 25-36 37+ Mar-10 22.9% 13.4% 8.7% 3.0% Jun-13 16.4% 8.5% 6
Slide 21: Mortgage Banking – Non credit-impaired loans
Mortgage Banking – Non credit-impaired loans As disclosed on September 9, 2013 (not updated) Credit update 90+ Day Delinquencies, excl. PCI (‘000 units) Loss severities at initial write-down, excl. PCI 45% 200 40% 180 35% 160 30% 140 25% 120 20% 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Jan-
Slide 22: Mortgage Banking – Purchased credit-impaired loans
Mortgage Banking – Purchased credit-impaired loans As disclosed on September 9, 2013 (not updated) Credit update HPI assumptions – change from peak Commentary As of year-end Initial fair value mark reflected $30.5B of estimated 2013 2014 2015 2016 lifetime principal credit losses 4Q11 (31)% (26)%
Slide 23: Real Estate Portfolios and Card Services – Coverage ratios
Real Estate Portfolios and Card Services – Coverage ratios Real Estate Portfolios and Card Services credit data ($mm) O/(U) 1 Adjusted 3Q13 2Q13 3Q12 3Q12 Real Estate Portfolios (NCI) Net charge-offs $204 $288 $595 1 ($391) 1 NCO rate 0.70% 1.00% 1.93% (123)bps Allowance for loan losses $2,768 $3,26
Slide 24: Firmwide – Coverage ratios
Firmwide – Coverage ratios $mm 5.00% Loan loss reserve/Total loans1 Loan loss reserve Nonperforming loans Loan loss reserve/NPLs1 500% 4.00% 400% 28,350 3.00% 27,609 300% 25,871 23,791 2.00% 22,824 21,936 20,780 200% 19,384 17,571 1.00% 11,005 9,993 100% 10,605 10,068 11,370 10,720 10,426 9,734 9,09
Slide 25: Peripheral European exposure
Peripheral European exposure1 As of September 30, 2013 ($B) Securities and trading AFS Derivative Portfolio Net Lending securities Trading collateral hedging exposure Spain $3.1 $0.4 $3.4 ($1.9) ($0.4) $4.6 Sovereign 0.0 0.4 (0.2) 0.0 (0.1) 0.1 Non-sovereign 3.1 0.0 3.6 (1.9) (0.3) 4.5 Italy $2.5 $0
Slide 26: IB League Tables
IB League Tables League table results For YTD 2013, JPM ranked: YTD 2013 FY12 Rank Share Rank Share #1 in Global IB fees Based on fees: #1 in Global Debt, Equity & Equity-related Global IB fees1 1 8.8% 1 7.5% #1 in Global Long-term Debt #2 in Global Equity & Equity-related Based on volumes
Slide 27: Notes
Notes 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 managed basis starts wit
Slide 28: 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