Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Q2 2013 Earnings Presentation
24 slides from Jp Morgan Chase &'s earnings presentation, Jul 12, 2013
Slide 1: Financial Results 2Q13
FINANCIAL RESULTS 2Q13 July 12, 2013
Slide 2: 2Q13 Financial highlights
2Q13 Financial highlights 2Q13 net income of $6.5B; EPS of $1.60; revenue of $26.0B1 Strong performance across our businesses 2Q13 results included the following significant items $mm, excluding EPS Pretax Net income2 EPS2 Real Estate Portfolios – Benefit from reduced mortgage loan loss reserv
Slide 3: 2Q13 Financial results
2Q13 Financial results1 $mm, excluding EPS $ O/(U) 2Q13 1Q13 2Q12 Revenue (FTE)1 $25,958 $110 $3,066 Credit costs 47 (570) (167) Expense 15,866 443 900 Reported net income $6,496 ($33) $1,536 Net income applicable to common stock $6,101 ($30) $1,467 Reported EPS $1.60 $0.01 $0.39 ROE2 13% 13% 11% RO
Slide 4: Fortress balance sheet and returns
Fortress balance sheet and returns $B, except where noted 2Q13 1Q13 2Q12 Basel I Tier 1 common capital1,2 $147 $143 $130 Basel I Risk-weighted assets 2 1,414 1,407 1,319 Basel I Tier 1 common ratio 1,2 10.4% 10.2% 9.9% Basel III Tier 1 common Ratio RWA ($B) 1Q13 8.9% $1,654 Basel III Tier 1 common c
Slide 5: Leverage ratio update
Leverage ratio update JPM’s estimated Basel III leverage ratio based on July 2013 proposed U.S. leverage rule is 4.7% compared to Holding Company requirement of 5.0% Balance sheet view Proposed U.S. rule add-ons Leverage exposure Potential further add-ons per Basel proposal U.S. GAAP assets $2.4T
Slide 6: Consumer & Community Banking
Consumer & Community Banking1 $mm Leadership positions $ O/(U) Consumer & Business Banking 2Q13 1Q13 2Q12 #1 ATM network3 Net interest income $7,094 ($115) ($67) #2 in branches3 Noninterest revenue 4,921 515 (368) Revenue $12,015 $400 ($435) #1 most visited banking portal – Chase.com4 Expense
Slide 7: Consumer & Community Banking – Consumer & Business Banking
Consumer & Community Banking Consumer & Business Banking $mm Financial performance $ O/(U) Consumer & Business Banking net income of $698mm, 2Q13 1Q13 2Q12 down 25% YoY, but up 9% QoQ Net interest income $2,614 $42 ($47) Net revenue of $4.3B, down 1% YoY, but up 3% QoQ Noninterest revenue 1,673
Slide 8: Consumer & Community Banking – Mortgage Banking
Consumer & Community Banking Mortgage Banking $mm Financial performance $ O/(U) Mortgage Production pretax income of $582mm, down 2Q13 1Q13 2Q12 $349mm YoY, reflecting lower margins and higher expense, Mortgage Production partially offset by higher volumes and lower repurchase Production-related r
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 21% YoY 2Q13 1Q13 2Q12 Net income, excluding the reduction in the allowance for Revenue $4,670 ($50) $145 loan losses3, up 61% YoY Expense 1,988 45 (108) Revenue of $4.7B, up 3
Slide 10: Corporate & Investment Bank
Corporate & Investment Bank1 $mm Financial performance $ O/(U) Net income of $2.8B on revenue of $9.9B 2Q13 1Q13 2Q12 DVA gain of $355mm Corporate & Investment Bank revenue $9,876 ($264) $890 ROE of 20%; 19% excl. DVA Investment banking fees 1,717 284 472 Treasury Services 1,051 7 (23) Banki
Slide 11: Corporate & Investment Bank – Key metrics & leadership positions
Corporate & Investment Bank – Key metrics & leadership positions Corporate & Investment Bank Comments ($B) 1H13 FY2012 FY2011 FY2010 Corporate & Investment Bank International revenue $9.7 $16.3 $17.1 $15.7 48% of revenue is international for 1H13; 49% excl. DVA International deposits increased 3
Slide 12: Commercial Banking
Commercial Banking1 $mm Net income of $621mm, down 8% YoY and up 4% QoQ $ O/(U) Revenue of $1.7B, up 2% YoY 2Q13 1Q13 2Q12 Revenue $1,728 $55 $37 EOP loan balances up 9% YoY4; Middle Market loans up 2 Middle Market Banking 777 24 37 10% YoY4 2 Corporate Client Banking 444 11 8 Commercial Term
Slide 13: Asset Management
Asset Management1 $mm Net income of $500mm, up 28% YoY $ O/(U) Revenue of $2.7B, up 15% YoY 2Q13 1Q13 2Q12 Revenue $2,725 $72 $361 AUM of $1.5T, up 9% YoY Private Banking 1,483 37 142 Institutional 588 (1) 51 AUM net inflows for the quarter of $3B, driven by net Retail 654 36 168 inflows of
Slide 14: Corporate/Private Equity
Corporate/Private Equity1 $mm Private Equity $ O/(U) Private Equity net income was $212mm, primarily due to net valuation gains on private investments 2Q13 1Q13 2Q12 Private Equity portfolio of $8.0B Private Equity $212 $394 $15 Treasury and CIO Treasury and CIO (429) (453) 1,649 Treasury and
Slide 15: 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% 3.06% 2.74% 2.61% 2.47% 2.43% 2.40% 2.37% 2.20% 1.51% 1.41% 1.29% 1.17% 1.07% 1.11% 1.14% 1.05% 2 2 FY2010 FY2011 1Q12 2Q12 3Q12 4Q12 1Q13 2
Slide 16: Outlook
Outlook NIM & NII Consumer & Community Banking Expect NIM relatively stable in the second half of 2013 Mortgage Banking Total quarterly net charge-offs expected to be less than Expect the Firm's NII to be modestly up in 3Q13 vs. 2Q131 $250mm in 3Q13 If charge-offs and delinquencies continu
Slide 17: Agenda
Agenda Page Appendix 16 FINANCIAL RESULTS 16
Slide 18: Peripheral European exposure
Peripheral European exposure1 As of June 30, 2013 ($B) Securities and trading AFS Derivative Portfolio Net Lending securities Trading collateral hedging exposure Spain $3.1 $0.4 $4.1 ($2.0) ($0.4) $5.2 Sovereign 0.0 0.4 (0.3) 0.0 (0.1) 0.0 Non-sovereign 3.1 0.0 4.4 (2.0) (0.3) 5.2 Italy $2.3 $0.0 $1
Slide 19: Consumer credit – Delinquency trends
Consumer credit – Delinquency trends1 Home Equity delinquency trend ($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 $2,500 $3,000 $2,000 $2,000 $1,500 $1,000 $1,000 $500 $0 $0 Sep-09
Slide 20: Real Estate Portfolios and Card Services – Coverage ratios
Real Estate Portfolios and Card Services – Coverage ratios Real Estate Portfolios and Card Services credit data ($mm) O/(U) 1 Adjusted 2Q13 1Q13 2Q12 2Q12 Real Estate Portfolios (NCI) Net charge-offs $288 $448 $696 ($408) NCO rate 1.00% 1.56% 2.21% (121)bps Allowance for loan losses $3,268 $4,218 $6
Slide 21: Firmwide – Coverage ratios
Firmwide – Coverage ratios $mm Loan loss reserve/Total loans1 Loan loss reserve Nonperforming loans Loan loss reserve/NPLs1 5.00% 500% 4.00% 400% 28,520 28,350 3.00% 27,609 300% 25,871 23,791 22,824 2.00% 21,936 200% 20,780 19,384 1.00% 11,928 11,005 100% 9,993 10,605 10,068 11,370 10,720 10,426 9,7
Slide 22: IB League Tables
IB League Tables League table results 1H13 FY12 For 1H13, JPM ranked: Rank Share Rank Share #1 in Global IB fees Based on fees: #1 in Global Debt, Equity & Equity-related 1 1 8.9% 1 7.5% Global IB fees #1 in Global Long-term Debt Based on volumes: #2 in Global Equity & Equity-related; #1 i
Slide 23: 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 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. These statements are based on the current beliefs and expectations of JPMorgan Chase & Co.’s management and are subject to significant risks an