Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Investor Day (February 2020)
188 slides from Jp Morgan Chase &'s investor day presentation, Feb 25, 2020
Slide 1: Firm Overview
FIRM OVERVIEW February 25, 2020 FIRM OVERVIEW CORPORATE & INVESTMENT BANK CONSUMER & COMMUNITY BANKING ASSET & WEALTH MANAGEMENT COMMERCIAL BANKING
Slide 2: Complete, Global, Diversified franchise at scale
We have built a Complete, Global, Diversified franchise that is At Scale – positioned to outperform in any environment Exceptional Unwavering Long-term Sustainable business client franchises principles shareholder value practices Customer centric and easy Fortress balance sheet Continuously inves
Slide 3: Comprehensive approach to sustainable development
Our comprehensive approach to sustainable development integrates business, community and environmental objectives and leverages our global capabilities 1 Existing commitments (announced in 2017 ) Sustainable business Multi-year, cumulative commitment to facilitate $200B in green financing Expect t
Slide 4: Our client franchises are exceptional
Our client franchises are exceptional – with leadership positions across each business Consumer & Community Banking 2019 Revenue1 ($B) Corporate & Investment Bank 63mm U.S. households, including 4mm small $119 Business with >80% of Fortune 500 companies businesses2 and presence in over 100 marke
Slide 5: 2019 was another year of record revenue and net income
2019 was another year of record revenue and net income $118.7BB▲ $36.4B ▲ 19% ▲ 55% ▼ revenue1,2 net income ROTCE3 OH ratio1,4 6% Revenue growth YoY 12% Net income growth YoY 19% 73% 68% 68% 15% 60% 8% 56% 3% 13% 55% 12% 12% 2% 3% 11% 0% (0)% (2)% (3)% (13)% (19)% JPM MS C BAC GS WFC JPM C MS BAC WF
Slide 6: Pre-tax income growth across each business
We have grown pre-tax income across each of our businesses – while capitalizing on a favorable economic environment Pre-tax income1,2 ($B) Macro environment CAGR unemployment +$13.8B $47.6 9% 50-year low 6% (U.S. unemployment rate3) 3.7 4% 5% $39.9 5.2 10% 4% 3.6 $33.8 3% '15 '16 '17 '18 '19 AWM 3.2
Slide 7: Benefited from rate environment and reinvested
We have benefited from the rate environment since 2015 – and we have reinvested the majority of that benefit back into the business Revenue1 ($B) Annual investment expense ($B) >$5B addl. investment spend $8 $119 $7 ($2) $8 $98 58 +29% >$3B increase +$13B total NII >$2B NII 45 increase 61 +15% NIR 5
Slide 8: Investments have strengthened our franchise and resiliency
Investments have strengthened our franchise and resiliency in a more challenging environment Broader Expanded products Productivity Tech & cyber distribution & capabilities & cost efficiencies New markets/locations Wholesale payments Significantly improved Driving cloud adoption Launched or
Slide 9: Captured share across businesses by investing consistently
We have captured share across businesses by investing consistently and leveraging our competitive advantages Consumer & Community Banking Corporate & Investment Bank Commercial Banking Asset & Wealth Management Retail Credit Markets Global Active LT fund Global CRE loans6 C&I loans6 deposits1 card s
Slide 10: Environment remains strong but presents cyclical headwinds
The environment remains strong, but presents us with potential cyclical headwinds… Declining rate environment challenging deposit margins Positive, but slowing, economic growth3… 3% '18 6% 2.5% '19 2% 5% Fed Funds rate1 '20F 2.0% 1% 4% 5 rate cuts (125bps) 0% 3% U.S. Euro area U.K. Japan Emerging As
Slide 11: Broad diversification benefits us in cyclical environment
…but our broad diversification benefits us in a more cyclically challenged environment Lower rates have offsets across all our businesses… …and we benefit from a diverse set of clients and geographies CCB: Mortgage origination CIB: Mortgage trading Diversity of geographies Total mortgage origination
Slide 12: Secular challenges
In addition to cyclical headwinds, we also face more secular challenges… Pressure on interchange fees Active to passive shift Smaller wallets & overcapacity Growth in alternative pools of capital Card net interchange margin1 (%) U.S. equity funds by type2 (%) FICC global revenue pool3 ($B) Global pr
Slide 13: Scale and completeness address margin pressure
…but our scale, completeness and global franchises allow us to address broad-based margin pressure across the industry caused by these secular headwinds Active to passive pressuring Smaller wallets and electronification the entire asset management Enhanced competition for clients compressing trading
Slide 14: Complete, Global, Diversified and At Scale are competitive advantages
Being Complete, Global, Diversified and At Scale are our competitive advantages… Complete Promotes more engagement and deepening of relationships with customers Global Allows us to serve more clients everywhere while offering geographic diversification Diversified Supports more stable earnings
Slide 15: Banks have offered earnings growth and stability; we outperformed
Banks have offered earnings growth and stability over the long-term – and among banks we have outperformed Industry1 comparison Banks universe JPM clear outperformer 12% 12% 10% 10% JPM Real Estate Faster growth Faster Health Industrials 2 Care Comm. Services 8% 8% Materials Info Tech. Banks WFC PNC
Slide 16: Balance sheet: deposit growth and remixing of assets
Balance sheet – accelerating deposit growth and remixing of interest-earning assets YoY loan and deposit growth, quarterly avg. (%) Interest earning-assets, quarterly avg. ($B) Deposit growth Loan growth (excl. HL sales1) $2,378 $2,254 8% 191 Sec. borrowed/other2 170 4Q19: $1,568B 7.0% 248 '17-'19 g
Slide 17: Liquidity: HQLA stable, composition changed
Liquidity – level of HQLA has remained stable, while composition has changed HQLA1 composition, quarterly avg. ($B) LCR2: 116% In addition to our HQLA, we have $560 $545 ~$600B of other liquidity sources Other Other Including securities securities ~$300B of FHLB & FRB reverse repo UST borrowing
Slide 18: GSIB framework requires timely recalibration
GSIB framework requires timely short-term recalibration There is increasing pressure to remain in current buckets… … but there is a simple solution GSIB1 GSIB score2,3 bucket A capital-neutral package of revisions will expand capacity 730 4.0% JPM 1.1 Index GSIB-coefficients to GDP 630 3.5% 2.2 Decr
Slide 19: Capital targets remain consistent
Capital targets remain consistent as we await SCB & GSIB updates Targets – largely unchanged in absence of SCB1/GSIB update… … and our priorities remain the same Returned ~$34B to shareholders2 in 2019 LOB capital allocation3 philosophy and dollars unchanged Net payout of ~100% Hierarchy of
Slide 20: Net interest income outlook
Net interest income – we are not immune to the rate environment, but growth and mix will support NII in 2020 and beyond Net interest income1 ($B) 2021 assumptions: $60+/- Continued strong growth in deposits $57.8 $1 $57+ and card balances $2 Forward curve realized2 ($3.5) Lower asset Offset by y
Slide 21: Noninterest revenue growth
Noninterest revenue – steady growth in volume-driven NIR Noninterest revenue1 ($B) $60.9 $55.8 Market ~1/3 +11% dependent + CIB Markets + HL production Volume ~2/3 driven +3% + Auto leasing - HL servicing + CBB - Card Other2: ($1.7) Other2: $0.2 2018 2019 Debit and credit CBB CWM Avg. auto operating
Slide 22: Overhead ratio improvement
Overhead ratio – significant improvement driven by revenue growth and expense efficiencies Adjusted overhead ratio1,2 (%) Higher investments have more than offset the benefit from higher rates… <55% in the 1% medium term 5% 58% 55% (5%) (4%) …and expense efficiencies have offset volume-driven expens
Slide 23: Noninterest expense outlook
Noninterest expense – we expect a reduction in structural expenses to help fund our investment growth Adjusted noninterest expense1 ($B) ~2.5% growth $1.0 ~$67 $1.4 ($0.7) Auto lease 3.1% growth $65.3 depreciation Cost efficiencies, including: Workforce optimization $63.3 CCB volume growth T
Slide 24: Credit outlook
Credit – we remain vigilant despite a benign environment Net charge-offs Allowance for credit losses 2019 2020 outlook NCO rate NCOs ($B) NCO rate 2019 Home Lending1 (0.05)% $(0.1) ↔ Modestly No Firmwide net reserve build Card 3.10% 4.8 higher on mix CCB $500mm reserve build in Card Auto 0.33% 0
Slide 25: Strength of franchise supports financial performance
The strength of our franchise supports continued leading financial performance Exceptional client Complete franchises Medium term Unwavering Global ~17% principles ROTCE Long-term Diversified shareholder value <55% 11.5-12% Overhead ratio CET1 ratio Sustainable At Scale business practices 24
Slide 26: Agenda
Agenda Page 1 Appendix – Capital allocation 25 2 Notes 26
Slide 27: 2020 LOB capital allocation and ROE
2020 LOB capital allocation and ROE Avg. CET1 ($B) 2019 2020 Medium-term ROE CCB $52 $52 25%+ CIB 80 80 ~16% CB 22 22 ~18% AWM 10.5 10.5 25%+ Corporate 23.5 20.5 NM Firm ~$188 ~$1851 ~17% ROTCE LOB capital allocation and ROE remain unchanged ¹ Reflects average CET1 capital. Total Firm for 2020 is ba
Slide 28: Agenda
Agenda Page 1 Appendix – Capital allocation 25 2 Notes 26
Slide 29: Notes on non-GAAP financial measures
Notes on non-GAAP financial measures 1. In addition to analyzing the Firm’s results on a reported basis, management reviews Firmwide results, including the overhead ratio, on a “managed” basis; these Firmwide managed basis results are non-GAAP financial measures. The Firm also reviews the results of
Slide 30: Notes on sustainable development slide
Notes on slide 2 – Our comprehensive approach to sustainable development integrates business, community and environmental objectives and leverages our global capabilities 1. In 2017, JPMorgan Chase announced commitments to facilitate $200 billion in clean financing by 2025 and to source renewable en
Slide 31: Notes on client franchises slide (1/2)
Notes on slide 3 – Our client franchises are exceptional – with leadership positions across each business (1/2) 1. See note 1 on slide 26 2. 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 me
Slide 32: Notes on client franchises slide (2/2)
Notes on slide 3 – Our client franchises are exceptional – with leadership positions across each business (2/2) 11.The Commercial and Industrial (“C&I”) grouping is generally based on client segments and does not align with regulatory definitions 12.S&P Global Market Intelligence as of September 30,
Slide 33: Notes on record revenue slide
Notes on slide 4 – 2019 was another year of record revenue and net income 1. See note 1 on slide 26 2. Amounts for GS and MS represent reported revenue 3. See note 2 on slide 26 4. Managed overhead ratio = total noninterest expense / managed revenue; revenue for GS and MS is reflected on a reported
Slide 34: Notes on pre-tax income slide
Notes on slide 5 – We have grown pre-tax income across each of our businesses – while capitalizing on a favorable economic environment 1. Income before income tax expense on a Managed basis. See note 1 on slide 26 2. For a reconciliation of the Firm’s 2015 results from a reported to managed basis, s
Slide 35: Notes on rate environment slide
Notes on slide 6 – We have benefited from the rate environment since 2015 – and we have reinvested the majority of that benefit back into the business 1. See note 1 on slide 26 32
Slide 36: Notes on captured share slide
Notes on slide 8 – We have captured share across businesses by investing consistently and leveraging our competitive advantages 1. FDIC 2019 Summary of Deposits survey per S&P Global Market Intelligence. Includes a $500 million deposit cap for market share and a $500 million 10-year exclusion for gr
Slide 37: Notes on cyclical headwinds slide
Notes on slide 9 – The environment remains strong, but presents us with potential cyclical headwinds… 1. Board of Governors of the Federal Reserve System 2. J.P. Morgan calculation based on market data as of February 21, 2020 3. Historical data from U.S. Bureau of Economic Analysis, Eurostat, Office
Slide 38: Notes on diversification slide
Notes on slide 10 – …but our broad diversification benefits us in a more cyclically challenged environment 1. Firmwide mortgage origination volume was $115.9 billion and $86.9 billion for the years ended December 31, 2019 and 2018, respectively 2. “Agency trading” refers to market-making activities
Slide 39: Notes on secular challenges slide
Notes on slide 11 – In addition to cyclical headwinds, we also face more secular challenges… 1. Net interchange margin = net interchange income (interchange income less rewards costs and partner payments)/credit card sales volume 2. Morningstar, as of December, 1998, and April, 2019, respectively 3.
Slide 40: Notes on margin pressure slide
Notes on slide 12 – …but our scale, completeness and global franchises allow us to address broad-based margin pressure across the industry caused by these secular headwinds 1. AUM yield = long-term and cash management fees / average AUM 2. 2014 and 2019 fees and AUC adjusted for exited businesses. 2
Slide 41: Notes on banks earnings slide
Notes on slide 14 – Banks have offered earnings growth and stability over the long-term – and among banks we have outperformed 1. Includes all current constituents of the S&P 500 index that have been publicly traded since 2000 (includes 385 unique companies), grouped by sector. The Financials sector
Slide 42: Notes on balance sheet slide
Notes on slide 15 – Balance sheet – accelerating deposit growth and remixing of interest-earning assets 1. Quarterly average loan growth excludes the impact of Home Lending (“HL”) loan sales on average loan balances in each period 2. Sec. borrowed/other includes receivable from customers, which are
Slide 43: Notes on liquidity slide
Notes on slide 16 – Liquidity – level of HQLA has remained stable, while composition has changed 1. High-quality liquid assets (“HQLA”) represent the amount of unencumbered liquid assets that qualify for inclusion in the liquidity coverage ratio (“LCR”), and excludes excess HQLA at JPMorgan Chase Ba
Slide 44: Notes on GSIB slide
Notes on slide 17 – GSIB framework requires timely short-term recalibration 1. Global systemically important banks (“GSIB”) 2. JPMorgan Chase and peer calculations are based on Federal Reserve Form FR Y-15, Banking Organization Systemic Risk Report 3. Circular markers indicate a higher intra-year su
Slide 45: Notes on capital targets slide
Notes on slide 18 – Capital targets remain consistent as we await SCB & GSIB updates 1. Stress capital buffer (“SCB”) 2. Net of stock issued to employees 3. For an overview of the Firm’s business segment capital allocation methodology, see page 90 of the 2019 Form 10-K 42
Slide 46: Notes on net interest income slide
Notes on slide 19 – Net interest income – we are not immune to the rate environment, but growth and mix will support NII in 2020 and beyond 1. See note 1 on slide 26 2. JPMorgan Chase’s outlook is based on implied rate curves as of February 21, 2020 43
Slide 47: Notes on noninterest revenue slide
Notes on slide 20 – Noninterest revenue – steady growth in volume-driven NIR 1. See note 1 on slide 26 2. Other includes PE gains/(losses), securities gains/(losses), credit adjustments, FX, gain/(losses) in CIB including Day 1 gains from Tradeweb, gains/(losses) on HL loan sales, card rewards liabi
Slide 48: Notes on overhead ratio slide
Notes on slide 21 – Overhead ratio – significant improvement driven by revenue growth and expense efficiencies 1. See note 1 on slide 26 2. See note 3 on slide 26 45
Slide 49: Notes on noninterest expense slide
Notes on slide 22 – Noninterest expense – we expect a reduction in structural expenses to help fund our investment growth 1. See note 3 on slide 26 2. Includes compensation expense related to increased hiring of revenue-producing bankers 46
Slide 50: Notes on credit slide
Notes on slide 23 – Credit – we remain vigilant despite a benign environment 1. Reflects net charge-offs/(recoveries) on average retained loans, and excludes the impact of PCI loans and write-offs in the PCI portfolio. See Note 4 on slide 26. The net charge-off/(recovery) rates including the impact
Slide 51: Corporate & Investment Bank
CORPORATE & INVESTMENT BANK February 25, 2020 FIRM OVERVIEW CORPORATE & INVESTMENT BANK CONSUMER & COMMUNITY BANKING ASSET & WEALTH MANAGEMENT COMMERCIAL BANKING
Slide 52: Agenda
Agenda Page 1 CIB Overview 1 2 Banking 12 3 Securities Services 21 4 Closing Remarks 28 5 Notes 31
Slide 53: Strong results and record revenues in 2019
ANIMATION We delivered strong results and record revenues in 2019 Adjusted revenue and net income1 ($B) CIB ROE 1 14% 16% 14% 16% 14% Capital ($B) $62 $64 $70 $70 $80 50 30% $38.3 45 $36.4 $35.1 $34.6 25% ■ Revenue1 40 $33.3 20% 18% 20% 35 16% 15% 15% 30 ◆ Heritage TSS ROE 15% 15% 25 14% ▲ Heritage
Slide 54: Expenses increased due to higher revenues and investments
Expenses increased due to higher revenues and additional investments 2018 to 2019 ($B)1 $0.2 $0.1 $(0.3) $0.4 $21.1 $20.7 In-line with 2019 outlook of ~$21B 2018 Revenue Tech Non-tech Other 2019 Overhead related investments investments 57% 55% ratio1 1 Expense adjusted for legal expense. For footnot
Slide 55: ROE decreased from 15.9% to 14.0%
ROE decreased from 15.9% in 2018 to 14.0% in 2019, primarily driven by capital 1.3% (0.5%) (0.0%) (0.5%) Legal 16.2% (~2%) expense 0.3% 15.9% 14.4% Legal expense 14.0% 0.4% 14.50% 2018 Revenue related1 Rates Expenses Credit cost, Higher capital 2019 tax, & other 1 Includes changes in revenues and re
Slide 56: Track record of gaining market share globally
CIB has a strong track record of gaining market share and establishing leadership globally Number of businesses ranked 2019 global leadership positions compared to peers1,2,3 ■ #1 ■ #2-3 ■ #4+ 16 7 1 JPM Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Since 2015, we have gained share in each region and across bu
Slide 57: Global Investment Banking grew market share to 9.0%
Global Investment Banking grew market share for 4 consecutive years to 9.0% GIB ■ Industry wallet ($B) ◆ Market share ■ M&A ■ Industry wallet ($B) ◆ Market share ■ 9.2% 8.3% 8.3% 8.4% 8.7% 9.0% 8.6% $24 $25 $26 $29 $26 8.1% 7.8% 7.9% 2015 2016 2017 2018 2019 DCM 8.4% 8.3% 8.7% 7.9% 7.9% $84 $81 $77
Slide 58: Securities Services record mandates and fee revenue
Securities Services achieved record mandates and continues to grow fee revenue, offsetting the impact of the challenged rate environment Expanding business with existing clients and winning new mandates… …translating to resilient revenue performance NOT TO SCALE ■ Assets Under Custody1 ($T) ■ Assets
Slide 59: Leading positions in Markets businesses
We have leading positions in our Markets businesses and continue to gain share Equities1 Global Markets market share (%)1,2 ■ Industry wallet ($B) 2019 vs. 2015 2019 vs. 2018 ◆ Market share 15.0% 11.0% 11.3% JPM +2.5% +0.5% 9.7% 9.9% 8.4% Peer 1 +1.4% +0.3% Peer 2 +0.9% -0.1% $68 $59 $59 $63 $56 0.
Slide 60: Strong returns despite increased Markets capital
Despite increase in capital in our Markets businesses, we have maintained strong returns Impact of capital to ROE, 2015 - 2019 Equities FICC Marginal ROEs above cost of capital across all sub-products ~(300 bps) ~(600 bps) Revenue growth highly accretive Markets fully-loaded ROE, 2015 - 2019 ROE % ~
Slide 61: Unified Wholesale Payments business
Our unified Wholesale Payments business delivers full suite of solutions to clients across the firm Our business… Enabling clients to… Supported by… Make and accept payments anytime, …a shared infrastructure: anywhere, via any method Treasury Services Core technology platforms Wholesale Client conne
Slide 62: Treasury Services revenue growth
Treasury Services has experienced significant revenue growth despite rates headwinds Firmwide Treasury Services revenue growth1 Firmwide Treasury Services revenue growth relative to peers1,2,3 NOT TO SCALE ■ CIB Treasury Services ■ 2015 - 2019 Treasury Services revenue growth % ■ CB Treasury Service
Slide 63: Wholesale Payments positioned to capture growth
Wholesale Payments business is well positioned to capture growth opportunities SMBs U.S. Healthcare Corporates E-Commerce Financial Institutions Partnership with InstaMed Global footprint and Unique end-to-end USD clearing and Business Banking capabilities platform solution controls Core
Slide 64: Agenda
Agenda Page 1 CIB Overview 1 2 Banking 12 3 Securities Services 21 4 Closing Remarks 28 5 Notes 31
Slide 65: Select topics for Banking
Select topics for Banking Multi-year performance Continuity in coverage Completeness of coverage Growth opportunities 12
Slide 66: #1 in Global Investment Banking fees, 9.0% share
We maintained #1 rank in Global Investment Banking fees and achieved 9.0% market share in 2019 - the highest share in a decade ■ Market wallet ($B) ◆ JPM share ◆ Top bank (ex-JPM) ◆ Top 5 banks (ex-JPM)1 315 bps gap 180.0 185 bps gap 200 bps gap 9.0% 9.0% 8.5% 8.6% 160.0 8.0% 8.0% 8.1% 7.8% 7.9% 8.0
Slide 67: Grown market share faster than peers
We have consistently grown market share faster than peers across regions and products, improving our leadership position Equity Loan Bonds North America EMEA APAC LATAM M&A Underwriting Syndication Underwriting #1 #1 #3 #1 #2 #1 #1 #1 for 9 years in since 2014 from #7 in since 2018 since 2010 since
Slide 68: Continuity and completeness in coverage
Continuity and completeness in coverage allows us to capture opportunity across sectors, regions, and products There is large variation in sector, region, and product wallets year over year Sectors wallet (2015 - 2019) Regional wallet (2015 - 2019) Lowest Year 5 Year Average Highest Year Lowest Year
Slide 69: Continuity and completeness in coverage (sectors, regions)
Continuity and completeness in coverage allows us to capture opportunity across sectors, regions, and products There is large variation in sector, region, and product wallets year over year Sectors wallet (2015 - 2019) Regional wallet (2015 - 2019) Lowest Year 5 Year Average Highest Year Lowest Year
Slide 70: Continuity in coverage across client segments
Continuity and completeness in coverage across client segments Large episodic transactions frequency for clients (2015 - 2019) Wallet composition across fee size (2015 - 2019) % of clients that had a large episodic transaction every % of annual wallet 10% Large episodic 1 - 5 years transactions (>$5
Slide 71: Targeted investments and selective share gains
We are targeted with our investments and have gained share selectively 2015 Sectors 2019 Outcomes Targeted investment Targeted 10 sectors… 6 sectors with wallet Improved rank in 5 sectors 25+ sectors $4.5B+ Maintained #1 in 4 sectors 4 sectors with rank 3 or below and wallet $2.5B+ 2015 Co
Slide 72: Significant opportunities for growth in changing landscape
We see significant opportunities for growth in a changing industry landscape Greater insights to clients, faster Tech and analytics Enhanced banker productivity Improved client experience through digital capabilities Rising interest in alternative solutions Industry Evolution of IPO Trends m
Slide 73: Investing in relationships, people and execution
We are investing in relationships, people, and execution, while innovating to better serve our clients and fuel our growth Expanding and optimizing our coverage universe Leverage AI/ML to expand capacity Relationships Continuously review priorities Collaborate across all lines of business Rela
Slide 74: Agenda
Agenda Page 1 CIB Overview 1 2 Banking 12 3 Securities Services 21 4 Closing Remarks 28 5 Notes 31
Slide 75: Select topics for Securities Services
Select topics for Securities Services Our growth and performance Perspectives on an evolving industry Positioning our clients and our business for the future 21
Slide 76: Securities Services is a key strategic business
Securities Services is a key strategic business for the CIB Our clients... Our businesses… By the numbers… Custody $4.1B revenue2 in 2019 Asset Managers Fund Services #2 Custodian3 with ~$27T in AUC2 SECURITIES SERVICES Liquidity Asset Management & FX 98 markets Owners Lending & Collateral >20,000 d
Slide 77: Driving growth through new wins and expansion
Driving growth through new business wins, expansion of existing relationships, and investments in new capabilities and markets Growth Areas Assets Under Custody1 ($T) Assets Under Administration NOT TO SCALE Winning industry’s biggest mandates Successfully completed largest transition in the his
Slide 78: Securities Services strong performance despite headwinds
Securities Services has delivered strong performance, despite headwinds Strong Performance Revenue1 ($B) Operating Margin1 NOT TO SCALE Growing revenue in a challenged 4.1 environment +16% +7ppts Rate compression offset by fee and 3.6 deposit growth Record fee revenue, up +4% YoY Investments
Slide 79: A changing industry landscape
A changing industry landscape Industry trends…. … are driving client needs for Reduced costs Margin compression Greater efficiencies Expertise and scale to support wider range of asset Increased complexity classes, markets, and investment styles Need for accurate, Shared data environments ti
Slide 80: Securities Services strategy: three pillars
Securities Services is uniquely positioned to help our clients achieve their goals Our strategy is centered around three key pillars Investing in technology Leveraging the power of the Delivering efficiencies to our clients with data at the core Corporate & Investment Bank through integrated front-t
Slide 81: Well positioned for the future
Combined with the power of the franchise, Securities Services is well positioned for the future Deep front-to-back client relationships Deep Insights into end-to-end client needs Relationships Trusted expertise Unwavering focus on delivery Service Seamless execution at scale Excellence Conti
Slide 82: Agenda
Agenda Page 1 CIB Overview 1 2 Banking 12 3 Securities Services 21 4 Closing Remarks 28 5 Notes 31
Slide 83: Foundational technology improvements
Foundational technology improvements designed to enhance productivity and quality of services Deepen and improve investment Modernize our apps & governance infrastructure Continue to optimize our ~$12B tech spend Migrate to fewer, more efficient data centers Reinvest efficiencies and roll-offs
Slide 84: ROE walk to medium-term target
ROE walk: 2019 actuals to medium-term target ~16% 1.2% (0.3%) 0.6% Legal 14.4% expense 0.4% 14.0% Revenue ~$40B Overhead ratio 54%+/- Capital $80B 1 2019 Revenue related Investments Structural Medium-term 1 Includes changes in revenues and revenue related expenses Note: Excludes the impact of the Me
Slide 85: Global, complete and at scale; targeting growth
We are global, complete, and operate at scale; positioning us well to target growth opportunities Transforming for the future Optimizing our current Increased client breadth and depth model Omni-channel client connectivity Maintaining day-to-day Best-in-class products and services discipline Integra
Slide 86: Agenda
Agenda Page 1 CIB Overview 1 2 Banking 12 3 Securities Services 21 4 Closing Remarks 28 5 Notes 31
Slide 87: Notes on non-GAAP financial measures
Notes on non-GAAP financial measures 1. The CIB provides certain non-GAAP financial measures, which exclude the impact of past business simplification and exit actions, and legal expense on revenue, expense, net income, return on equity (“ROE”), overhead (“OH”) ratio, and Securities Services’ revenu
Slide 88: Notes on market share leadership slide
Notes on slide 4 – CIB has strong track record of gaining market share and establishing leadership globally 1. Competitor analytics reflects JPMorgan Chase’s share of the global industry revenue pool and is based on JPMorgan Chase’s business structure. Includes co-ranked positions Source: Dealogic
Slide 89: Notes on Markets businesses slide
Notes on slide 7 – We have leading positions in our markets businesses, and continue to gain share 1. Source: Coalition, preliminary 2019 market share analysis reflects JPMorgan Chase’s share of the global industry revenue pool and is based on JPMorgan Chase’s business structure. FY19 analysis is ba
Slide 90: Notes on Treasury Services slide
Notes on slide 10 – Treasury Services has experienced significant revenue growth despite rates headwinds 1. Source: Coalition, preliminary 2019 Competitor analysis reflects JPMorgan Chase’s share of the global industry revenue pool and is based on JPMorgan Chase’s business structure. FY19 analysis i
Slide 91: Consumer & Community Banking
CONSUMER & COMMUNITY BANKING February 25, 2020 FIRM OVERVIEW CORPORATE & INVESTMENT BANK CONSUMER & COMMUNITY BANKING ASSET & WEALTH MANAGEMENT COMMERCIAL BANKING
Slide 92: Agenda
Agenda Page 1 CCB Overview 1 2 Consumer & Business Banking 10 3 Consumer Lending 17 4 Closing Remarks 29 5 Notes 30
Slide 93: Consistent strategic priorities to drive shareholder value
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, ag
Slide 94: 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 95: 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 96: Topline growth volume-driven; pricing 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 97: Positive operating leverage
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 98: Efficiencies in 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%) shift self-service channels up >10ppt3 (1%) YoY Ops resources >
Slide 99: 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 100: Holistic customer value proposition
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 101: Strong positions; franchise more valuable than sum of 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 102: Agenda
Agenda Page 1 CCB Overview 1 2 Consumer & Business Banking 10 3 Consumer Lending 17 4 Closing Remarks 29 5 Notes 30
Slide 103: 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 $45B since 20141 deepening G
Slide 104: Position of strength in Consumer & Business Banking
We’re operating from a position of strength in Consumer & Business Banking We’re driving strong momentum across key business drivers ($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 105: Acquisition and deepening: continuum of solutions
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 106: Increased reach and 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 107: Extending Chase to new markets
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 108: Engagement with payments and digital capabilities
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 109: Reducing cost to serve; optimizing 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 110: Agenda
Agenda Page 1 CCB Overview 1 2 Consumer & Business Banking 10 3 Consumer Lending 17 4 Closing Remarks 29 5 Notes 30
Slide 111: Priorities for 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 experience
Slide 112: Consumer Lending drives 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 113: Data, analytics and technology
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 114: Bringing digital experiences together
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 115: Card: industry leading sales and 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 product launches and valuable customer- YoY growth in cred
Slide 116: Card: top of wallet success
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 117: Card: strong revenue trends
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 118: Home Lending: customer-centric 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 119: Home Lending: investing in capabilities
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 120: Home Lending: 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 121: Risk and controls
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 122: 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 123: Agenda
Agenda Page 1 CCB Overview 1 2 Consumer & Business Banking 10 3 Consumer Lending 17 4 Closing Remarks 29 5 Notes 30
Slide 124: Leading franchise and opportunity for 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 presence
Slide 125: Agenda
Agenda Page 1 CCB Overview 1 2 Consumer & Business Banking 10 3 Consumer Lending 17 4 Closing Remarks 29 5 Notes 30
Slide 126: Notes on commitments slide
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 127: Notes on key drivers slide
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 128: Notes on efficiencies slide
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 129: Notes on investment returns slide
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 130: Notes on customer value proposition slide
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 131: Notes on strong positions slide
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 132: Notes on priorities progress slide
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 133: Notes on Consumer & Business Banking slide
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 134: Notes on market expansion slide
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 135: Notes on Consumer Lending acquisition slide
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 136: Notes on data assets slide
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 137: Notes on Card franchise slide
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 138: Notes on top of wallet slide
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 139: Notes on Home Lending capabilities slide
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 140: Notes on productivity slide
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 141: Notes on risk management slide
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 142: Notes on Consumer Lending business slide
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.
Slide 143: Asset & Wealth Management
ASSET & WEALTH MANAGEMENT February 25, 2020 FIRM OVERVIEW CORPORATE & INVESTMENT BANK CONSUMER & COMMUNITY BANKING ASSET & WEALTH MANAGEMENT COMMERCIAL BANKING
Slide 144: One of the world's leading Asset & Wealth Managers
One of the world’s leading Asset & Wealth Managers Long-term, fiduciary Strong long-term investment performance: 88% 10-year JPMAM LT MF AUM above peer median1 mindset Client-centric franchises for nearly 200 years Global scale Global presence: 1,000+ AM investment professionals and 6,500+ JPM
Slide 145: A decade of growth – AWM
A decade of growth A decade of growth – AWM Record Client assets (EOP, $T) Revenue ($B)1 Pretax income ($B) 10-yr 10-yr 10-yr 2009 2019 CAGR 2009 2019 CAGR 2009 2019 CAGR 3.2 14.3 3.7 7% 5% 5% AUS + AUM 2.4 7% 1.7 AUM 1.2 8.6 2.3 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Pretax margin R
Slide 146: A decade of growth: AM and WM business metrics
A decade of growth A decade of growth: AM and WM business metrics Record End of period, $B, unless noted Asset Management Wealth Management 2009-19 2009-19 2009 2019 Growth 2009 2019 Growth Robust Revenue1 $4.7 $7.3 1.5x Revenue $3.8 $7.1 1.8x Financials Pretax income2 $1.4 $1.9 1.4x Pretax
Slide 147: Mutual benefits from being part of JPMorgan Chase
A decade of growth Mutual benefits from being part of JPMorgan Chase Annual figures unless otherwise indicated JPMC Asset and Wealth Management 63mm U.S. households ~45% U.S. PB clients use branch Client Reach ~5K branches and expanding to reach ~95% U.S. population1 ~4,000 International UHN
Slide 148: AWM growth drivers for the next decade
Next decade AWM growth drivers for the next decade 1 2 3 4 5 Focusing Expanding Scaling Building Considering U.S. Wealth Management Global Private Bank Asset Management Alternatives M&A Expand branch footprint to Grow globally, leveraging Unmatched client reach and 50 years of innovation and
Slide 149: U.S. Wealth Management: growing from a position of strength
Next decade 1 U.S. Wealth Management: Growing from a position of strength Significant growth opportunity for JPMC ~$50T ~$68T ~65% 200+ Market size opportunity1 across Intergenerational wealth transfer % of clients which would consider leaving a firm if Reported U.S. wealth management a highly-fragm
Slide 150: Global Private Bank: consistently growing
Next decade 2 Global Private Bank: Consistently growing the business, while investing for the future JPM PB strategically growing… Opportunity Advisor hiring Converted client referrals Net new clients Client asset flows ~1,300 Hundreds 11,000+ ~$200B ~9% Advisors hired of conversions Net New Clients
Slide 151: Global Private Bank: serving clients across balance sheet
Next decade 2 Global Private Bank: Continue to serve clients across their balance sheet Record Investments Deposits Loans PB LT AUM plus Brokerage year-end balances ($B)1 PB year-end spot balance ($B)1 PB year-end spot balance ($B)1 Equity Multi-Asset & Alts Mortgages2 Fixed Income Brokerage Loans (
Slide 152: Asset Management: strong performance provides opportunity to scale
Next decade 3 Asset Management: Strong investment performance provides opportunity to scale Performance Growth Opportunity 88% of 10-year JPMAM LT MF AUM above peer median1 Asset Management LT AUM ($T) Current share3 >74% 50-74% 25-49% 0-24% JPMAM CAGR Equity Active Industry 2 9% U.S.: 94% CAGR 7% I
Slide 153: Asset Management: cross-asset class income franchise
Next decade 3 Asset Management: Complete cross-asset class income franchise Equity Income Fund Fixed Income: Income Fund ETF: JPST MAS: Income Builder Fund Alts: Infrastructure Strategy #1 in 2019 Flows #2 in 2019 Flows #3 in 2019 Flows #3 in 2019 Flows $5 Billion Morningstar category rank1 Mornings
Slide 154: Alternatives: harnessing innovation to drive growth
Next decade 4 Alternatives: Harnessing 50 years of innovation to drive growth Diversified, growing platform Initiatives to drive future growth AWM Client Assets, $B1 Largest U.S. Core Real Estate open-end commingled fund6 248 WM 3rd Party AUS Continue to scale flagships – launch new capabilities
Slide 155: M&A: potential strategy to supplement organic growth
Next decade 5 M&A: A potential strategy to supplement our organic growth Industry dynamics favorable for M&A Our approach to M&A Structural industry change Organic growth preferred method to grow our franchises (e.g., fees, passive, costs) Key success factors M&A will always prioritize our cli
Slide 156: Successfully navigating industry headwinds
Position of strength Successfully navigating industry headwinds % of 10-year JPMAM LT MF AUM above peer median1 Industry headwinds Multi-Asset Solutions Maintaining strong, Total JPMAM Equity Fixed Income & Alternatives long-term investment performance 88% 91% 81% 90% Fee pressure AUM of Top 5 New E
Slide 157: Power of a broad, diversified platform
Position of strength Power of a broad, diversified platform 5Y Total Client Asset Flows ($B) 194 Publically-traded peers only 2 JPMC Total Client #1 BLK $1,272 Asset Flows ($B)1 123 127 (LT AUM + Liquidity + AUS + 100 1 89 97 #2 JPMC $509 CWM AUS + CPC Deposits) 71 82 28 36 #3 GS3 $479 Legend ≥ $0 #
Slide 158: Continuing to invest in the business
Position of strength Continuing to invest in the business Front Office Technology Front office spend Technology spend (% of revenue) Continue to hire the best talent in the growth industry – 500+ hires planned in 2020 Tech spend to drive and Investment efficiency, manage risk ~$320mm AM resear
Slide 159: How we measure against our targets
Position of strength How we measure against our targets Previous Targets LT AUM Revenue Pretax income Pretax Flows growth growth margin ROE Medium-term 4% 5% 10% 30% 25%+ targets (+/-) 2017 – 2019 2 – 7% 2 – 8% 1 – 3% 26% 25 – 31% Results range1 Meeting target New Targets LT AUM Revenue Pr
Slide 160: Agenda
Agenda Page 1 Notes 7 JPMorGAN CHASE & Co.
Slide 161: Notes on leading Asset & Wealth Managers slides
Notes on slides 1-2 Slide 1 – One of the world’s leading Asset & Wealth Managers 1. The “% 10-year JPMAM LT MF AUM above peer median” analysis: All quartile rankings, the assigned peer categories and the asset values used to derive this analysis are sourced from Lipper, Morningstar and Nomura based
Slide 162: Notes on AM and WM business metrics slide
Notes on slide 3 – A decade of growth: AM and WM business metrics 1. Historical revenue revised as a result of the adoption of the new accounting guidance for revenue recognition, effective January 1, 2018 2. Does not include expense allocated to AWM Center in 2009 3. Represents the Nomura “star rat
Slide 163: Notes on mutual benefits slides
Notes on slides 4-8 Slide 4 – Mutual benefits from being part of JPMorgan Chase 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. Defined as You Invest Trade clients who digitally
Slide 164: Notes on Asset Management performance slide
Notes on slide 9 – Asset Management: Strong investment performance provides opportunity to scale 1. The “% 10-year JPMAM LT MF AUM above peer median” analysis: All quartile rankings, the assigned peer categories and the asset values used to derive this analysis are sourced from Lipper, Morningstar a
Slide 165: Notes on cross-asset income franchise slide
Notes on slide 10 – Asset Management: Complete cross-asset class income franchise 1. Source: Strategic Insight Simfund retrieved February 10, 2020, based on Large Value Morningstar fund category. Excludes Index and Fund of Funds 2. Source: Morningstar. 5Y return (net of fees), 5Y percentile rankings
Slide 166: Notes on cross-asset income franchise (continued)
Notes on slide 10 – Asset Management: Complete cross-asset class income franchise (continued) 18.Past performance is not indicative of future returns. Returns include the re-investment of income. Performance numbers represent a composite return of the combined fund investor vehicles in existence as
Slide 167: Notes on Alternatives slide
Notes on slide 11 – Alternatives: Harnessing 50 years of innovation to drive growth 1. Includes fee and non-fee earning assets. Product classifications are J.P. Morgan’s own and are based on internal investment management structures; Strategic Insight Simfund categorization also used to classify Liq
Slide 168: Notes on industry headwinds slide
Notes on slide 13 – Successfully navigating industry headwinds 1. The “% 10-year JPMAM LT MF AUM above peer median” analysis: All quartile rankings, the assigned peer categories and the asset values used to derive this analysis are sourced from Lipper, Morningstar and Nomura based on country of domi
Slide 169: Notes on broad diversified platform slides
Notes on slides 14-16 Slide 14 – Power of a broad, diversified platform 1. Includes Asset & Wealth Management, Chase Wealth Management investments, and new-to-firm Chase Private Client Deposits from 2012-2019; prior to 2012, flows data for Chase Wealth Management investments and new-to-firm Chase Pr
Slide 170: Commercial Banking
COMMERCIAL BANKING February 25, 2020 FIRM OVERVIEW CORPORATE & INVESTMENT BANK CONSUMER & COMMUNITY BANKING ASSET & WEALTH MANAGEMENT COMMERCIAL BANKING
Slide 171: Commercial Banking – executing a proven strategy
Commercial Banking – executing a proven strategy Clients at the center of everything we do Client focus Coverage strategically aligned to best serve our clients Local delivery and decision-making, with deep sector expertise Industry-leading, broad-based capabilities Strong franchise Operat
Slide 172: Strong results in 2019 driven by client focus
Strong results in 2019 driven by consistent client focus Client focus Financial performance 2017 2018 2019 2017 2018 2019 1,766 1,922 2,101 $8.6 $9.1 $9.0 Bankers1 Revenue ($B) $4.2 236 278 295 $3.5 $3.9 Client calls (000s)2 Net income ($B) 1,706 1,232 1,062 8 bps New relationships2 NCO rate 2 bps 3
Slide 173: Opportunity to grow across C&I franchise
Tremendous opportunity to grow across our C&I franchise Continuing to expand and invest in our capabilities to acquire new great clients… Innovation Economy Government International 39k C&I prospects Targeting 5,400 prospects Pursuing 600 government Focusing on ~1,200 non-U.S. across high-growth ind
Slide 174: Executing middle market expansion strategy
Executing middle market expansion strategy Expansion market revenue ($mm)1 $1,000 47 MSAs added since 20082 $723 $647 460 MMBSI expansion market bankers3 $521 $412 $332 $354 $298 $234 $139 $53 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 LT Target 2010-19 CAGR Clients (#) 820 1,100 1,360 1,470
Slide 175: Opportunity across new markets
Substantial, visible opportunity across new markets Los Angeles – new market Chicago – legacy market 2nd 9 3k 3rd 150+ 3k Largest MSA Years in market Clients & prospects Largest MSA Years in market Clients & prospects Strong performance to date in Los Angeles, with significant market opportunity Los
Slide 176: Building upon strong middle market franchise
Well positioned to build upon our strong middle market franchise Middle Market Banking & Specialized Industries market opportunity Prospective 36k+ MMBSI clients1 MMBSI 125 locations1 Top 100 MSAs in 75 Middle Market footprint MMBSI offices located 86% within branch network2 MMBSI footprint Prospect
Slide 177: Replicating proven strategy internationally
Replicating our proven strategy internationally Targeting non-U.S. headquartered global companies Building with discipline Foreign companies focused on global growth, driving Established new teams across 10 countries in EMEA, demand for international banking solutions APAC and LATAM Providing
Slide 178: Specialized industries model
Specialized industries model drives superior value and risk management Prudent industry and client selection >50% Clients with specialized industry coverage Deep industry expertise in underwriting Sector-specific advice and content to support clients Industry-tailored client solutions 17 Spe
Slide 179: Opportunity in the healthcare ecosystem
Substantial opportunity to address the needs of the healthcare ecosystem Well-positioned to capture the large and growing opportunity 1 1 ~$4T healthcare expenditure in the U.S.1 Growing faster than U.S. GDP On pace to represent ~20% of U.S. GDP Dedicated healthcare bankers 800 Clients and specialis
Slide 180: Differentiated treasury capabilities
Differentiated treasury capabilities provide substantial value to clients Leveraging benefits of scale and breadth of market leading solutions… Integrated payments Liquidity management Merchant services Cross-border solutions Payment capabilities to realize Sophisticated tools to manage End-to-end s
Slide 181: Delivering the best investment bank to CB clients
Delivering the best investment bank to CB clients Commercial Banking gross investment banking revenue1 ($B) JPMC N.A. IB fees represented 44% by CB clients2 $3.0 $2.7 $2.5 $2.4 $2.3 $2.2 $2.0 $1.7 $1.6 $1.4 $1.3 $1.2 $1.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 LT Target 11 1 Rep
Slide 182: Positioned for long-term success in CRE
Positioned for continued long-term success in CRE Community Development Banking Real Estate Banking Commercial Term Lending ~600 clients ~600 clients ~33,000 clients Capital to support affordable housing Banking top-tier clients in major markets Term financing on stabilized properties in devel
Slide 183: Strong risk focus and smart growth across portfolio
Strong risk focus and smart growth across our portfolio Average loans by client segment ($B) Rigorous client selection 1 Limiting exposure to riskier industries and C&I CRE asset classes across C&I and CRE $206 $208 $198 Market and industry expertise Benefiting from market knowledge and specialized
Slide 184: Maintaining risk discipline – C&I
Maintaining risk discipline – C&I Portfolio summary Market commentary Strong credit performance through the cycle Credit quality remains strong, with no material, 87% of non-investment grade exposure is secured1 broad-based signs of deterioration in the market Diversified across industries a
Slide 185: Maintaining risk discipline – CRE
Maintaining risk discipline – CRE Portfolio summary Market commentary $80B of loans in Commercial Term Lending, with $2mm average loan size Competition remains elevated with late-cycle LTV ratio of 51%, DSC ratio of 1.5x for 2019 originations1 characteristics, particularly from non-bank lender
Slide 186: Driving efficiency while investing in the franchise
Driving efficiency while continuing to invest in the franchise Growth Market expansion People Empowering front office Entering new markets Investing in talent through Implemented new CRM1 system; domestically and internationally hiring, training and development onboarded 3k+ users Client value Digit
Slide 187: Financial targets
Financial targets 2019 2014-2019 Target Middle Market $723mm 17% CAGR $1.0B Execute growth expansion initiatives Investment banking1 $2.7B 7% CAGR $3.0B (long-term revenue targets) International2 $465mm 8% CAGR $1.0B Maintain expense discipline Overhead ratio 39% 39% avg. 40% +/- (medium-term) Optim
Slide 188: Positioned for continued success over the long-term
Positioned for continued success over the long-term Unmatched ability to support clients’ needs as they grow Complete, global & Local delivery and expertise across domestic and international locations diversified Differentiated platform, delivering the Investment Bank and Asset & Wealth Manage