Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Q3 2011 Earnings Presentation
24 slides from Jp Morgan Chase &'s earnings presentation, Oct 13, 2011
Slide 1: Financial Results 3Q11
FINANCIAL RESULTS 3Q11 October 13, 2011
Slide 2: 3Q11 Financial highlights
3Q11 Financial highlights 3Q11 net income of $4.3B; EPS of $1.02; revenue of $24.4B1 3Q11 results include the following significant items (*) $ in billions, excluding EPS Pretax Net Income2 EPS2 Investment Bank - benefit from debit valuation adjustment ("DVA") gains $1.9 $1.2 $0.29 Corporate - P
Slide 3: 3Q11 Financial results
3Q11 Financial results1 $ millions, excluding EPS $ O/(U) 3Q11 2Q11 3Q10 Revenue (FTE)1 $24,368 ($3,042) $33 Credit Costs1 2,411 601 (812) Expense 15,534 (1,308) 1,136 Reported Net Income $4,262 ($1,169) ($156) Net Income Applicable to Common Stock $3,936 ($1,131) ($83) Reported EPS $1.02 ($0.25) $0
Slide 4: Investment Bank
Investment Bank1 $ in millions Net income of $1.6B on revenue of $6.4B $ O/(U) DVA gains of $1.9B pretax ($1.2B after-tax) 3Q11 2Q11 3Q10 ROE of 16% Revenue $6,369 ($945) $1,016 Investment Banking Fees 1,039 (883) (463) IB fees of $1.0B down 31% YoY on lower Fixed Income Markets 3,328 (952)
Slide 5: Retail Financial Services
Retail Financial Services1 $ in millions Net income of $1.2B, compared $ O/(U) with $716mm in the prior year 3Q11 2Q11 3Q10 Retail Financial Services Revenue of $7.5B, up 11% YoY Net Interest Income $4,062 $35 ($218) and 6% QoQ Noninterest Revenue 3,473 358 939 Revenue $7,535 $393 $721 Expense 4
Slide 6: Retail Financial Services: Consumer & Business Banking
Retail Financial Services Consumer & Business Banking $ in millions Financial performance $ O/(U) Consumer & Business Banking net income of 3Q11 2Q11 3Q10 $1.0B, up 22% YoY Net Interest Income $2,730 $24 ($14) Net revenue of $4.7B, up 6% YoY driven by higher Noninterest Income 1,952 63 260 Reven
Slide 7: Retail Financial Services: Mortgage Production and Servicing
Retail Financial Services Mortgage Production and Servicing $ in millions Financial performance $ O/(U) Mortgage Production and Servicing net income of 3Q11 2Q11 3Q10 $205mm, compared with $25mm in the prior year Production Production-related Revenue excl. Repurchase Losses $1,304 $338 ($144) Pr
Slide 8: Retail Financial Services: Real Estate Portfolios
Retail Financial Services Real Estate Portfolios $ in millions Net loss of $67mm compared with net loss of $148mm in the prior year $ O/(U) 3Q11 2Q11 3Q10 Total net revenue of $1.2B down 13% YoY Revenue $1,151 ($66) ($174) driven by a decline in net interest income Expense 363 (8) (27) as a resu
Slide 9: Mortgage Banking Portfolios update
Mortgage Banking Portfolios update Key statistics1 Delinquency trends flattened in 3Q11 3Q11 2Q11 3Q10 Home equity, subprime mortgage and EOP owned portfolio ($B) Home Equity $80.3 $82.7 $91.7 prime mortgage net charge-offs Prime Mortgage, including option ARMs2 60.3 61.3 65.1 improved slightly
Slide 10: Card Services & Auto
Card Services & Auto1 $ in millions Card Services & Auto $ O/(U) Net income of $849mm compared with $926mm in the 3Q11 2Q11 3Q10 prior year Card Services & Auto Revenue of $4.8B down 6% YoY and flat QoQ Revenue $4,775 $14 ($310) Credit Costs 1,264 320 (520) Credit costs of $1.3B reflect lower
Slide 11: Commercial Banking
Commercial Banking1 $ in millions Net income of $571mm up 21% YoY $ O/(U) 3Q11 2Q11 3Q10 Revenue of $1.6B up 4% YoY Revenue $1,588 ($39) $61 Middle Market Banking 791 2 25 EOP loan balances up 9% YoY and 5% QoQ Corporate Client Banking 306 (33) 2 5th consecutive quarter of increased loan Com
Slide 12: Treasury & Securities Services
Treasury & Securities Services $ in millions Net income of $305mm up 22% YoY and down $ O/(U) 8% QoQ 3Q11 2Q11 3Q10 Pretax margin of 24% Revenue $1,908 ($24) $77 QoQ decrease due to a decline in securities Treasury Services 969 39 32 lending and depositary receipts revenue Worldwide Securities
Slide 13: Asset Management
Asset Management $ in millions Net income of $385mm down 8% YoY $ O/(U) Pretax margin of 21% 3Q11 2Q11 3Q10 Revenue $2,316 ($221) $144 Revenue of $2.3B up 7% YoY Private Banking 1,298 9 117 Institutional 455 (249) (51) Assets under management of $1.3T flat YoY; Retail 563 19 78 Assets under
Slide 14: Corporate/Private Equity
Corporate/Private Equity1 Net Income ($ in millions) Private Equity $ O/(U) 3Q11 2Q11 3Q10 Private Equity negative net revenue of $546mm Private Equity ($347) ($791) ($691) Private Equity portfolio of $7.4B (5.5% of Corporate (298) (356) (302) stockholders’ equity less goodwill) Net Income ($645
Slide 15: Fortress balance sheet
Fortress balance sheet $ in billions 3Q11 2Q11 3Q10 Basel I Tier 1 Common Capital1,2 $120 $121 $111 Basel III Tier 1 Common Capital1,2,3 (Estimate) $119 $120 $111 Basel I Risk-Weighted Assets1 $1,221 $1,199 $1,170 Basel III Risk-Weighted Assets1,2,3 (Estimate) $1,549 $1,569 $1,637 Total Assets $2,28
Slide 16: Outlook – 4Q11
Outlook – 4Q11 Investment Bank Asset Management Not unreasonable right now to expect markets in Expect lower revenue from 3Q11 run-rate due to 4Q to be similar to 3Q declines in asset values Retail Financial Services Corporate / Private Equity Consumer & Business Banking results will reflect
Slide 17: Comments on 2012
Comments on 2012 Investment Bank – hard not to be cautious Asset Management – dependent on market levels Expect continued spread compression to impact earnings momentum Consumer & Business Banking – Durbin Amendment will negatively impact net income by $600mm +/- – Spread compression, given
Slide 18: Our Euro net exposure – Risk view
Our Euro 5 net exposure1 – Risk view $ in billions AFS Portfolio Securities2 Trading 3 hedging Lending Net exposure Total Firmwide exposure $3.7 $8.7 ($5.2) $7.9 $15.1 Approximately 85% of total firmwide exposure is to Italy and Spain AFS securities exposure – ~90% government guaranteed Tradin
Slide 19: Agenda
Agenda Page Appendix 18 FINANCIAL RESULTS 18
Slide 20: Consumer credit — delinquency trends
Consumer credit — delinquency trends (Excl. purchased credit-impaired loans and WaMu and Commercial Card portfolios) Home Equity delinquency trend ($ in millions) Prime Mortgage delinquency trend ($ in millions) $4,000 $6,500 30 – 150 day delinquencies 30 – 150 day delinquencies 150+ day delinquenci
Slide 21: Coverage ratios are strong
Coverage ratios are strong $ in millions Loan Loss Reserve/Total Loans1 Loan Loss Reserve Nonperforming Loans Loan Loss Reserve/NPLs1 6.00% 500% 5.00% 400% 4.00% 300% 30,633 31,602 38,186 35,836 34,161 32,266 29,750 28,520 28,350 3.00% 200% 2.00% 100% 17,767 17,564 17,050 16,179 15,503 14,841 13,441
Slide 22: IB League Tables
IB League Tables League table results For YTD Sept 30, 2011, JPM ranked: YTD 2011 FY10 Rank Share Rank Share #1 in Global IB fees Based on fees: #1 in Global Debt, Equity & Equity-related Global IB fees 1 1 8.4% 1 7.6% #4 in Global Equity & Equity-related Based on volumes: #1 in Global Lon
Slide 23: Notes on non-GAAP & other financial measures
Notes on non-GAAP & other financial measures 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
Slide 24: Forward-looking statements
Forward-looking statements 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 & Co.’s management and are subject to significant risks a