Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Q2 2006 Earnings Presentation
16 slides from Jp Morgan Chase &'s earnings presentation, Jul 19, 2006
Slide 1: Financial Results Second Quarter 2006
F I N A N C I A L R E S U L T S Second Quarter 2006 J U L Y 1 9, 2 0 0 6
Slide 2: 2Q06 Managed Results
2Q06 Managed Results1 ($ in millions) 1 Managed basis presents revenue and credit costs without the effect of credit card securitizations. All references to credit costs refer to managed provision for credit losses. 2 Actual numbers for all periods, not over/under
Slide 3: 2Q06 Significant Items
2Q06 Significant Items ($ in millions) Card results benefited from continued low bankruptcy losses Corporate Trust business moved to Discontinued Operations in Corporate
Slide 4: Investment Bank
Investment Bank ($ in millions) 1 Actual numbers for all periods, not over/under 2 Average Trading and Credit Portfolio VAR 3 Ratio is calculated excluding effect of SFAS 123R Net income of $839mm up 37% YoY and down 1% QoQ ROE of 16% on higher allocated capital of $21bn Record IB fees of $1.4 billi
Slide 5: Retail Financial Services
Retail Financial Services ($ in millions) 1 Actual numbers for all periods, not over/under Net income of $868 million down 11% YoY and 1% QoQ driven by weaker results in Mortgage Banking Continued growth in key business drivers; some pressure on rates and margins given competitive and market environ
Slide 6: Regional Banking
Regional Banking ($ in millions) 1 Actual numbers for all periods, not over/under Average deposits up 7% YoY; EOP balances down QoQ reflecting seasonality Branch production statistics YoY Checking accounts up 7% Credit card sales up 119% Mortgage loans up 46% Revenue up 4% YoY due to higher deposit
Slide 7: Mortgage Banking & Auto Finance
Net income up due to improved spreads on lower balances Credit costs seasonally low Mortgage Banking & Auto Finance Auto Finance ($mm) 1 Actual numbers for all periods, not over/under Note: Results include loss on transfer of auto loans to held-for-sale of ($45)mm in 1Q06 Mortgage Banking ($mm) Incr
Slide 8: Card Services (Managed)
Card Services (Managed) ($ in millions) 1 Actual numbers for all periods, not over/under Net income of $875mm up 61% YoY; ROO of 4.05% Avg outstandings of $137bn up 1% YoY and down 1% QoQ; EOP outstandings of $139bn up 1% YoY and 4% QoQ Balances negatively affected by continued high payment rates Co
Slide 9: Commercial Banking
Commercial Banking ($ in millions) 1 Actual numbers for all periods, not over/under 2 Includes deposits and deposits swept to on-balance sheet liabilities Net income of $283mm Loans up 10% YoY driven by growth across all segments Liability balances up 11% YoY Revenue up 9% YoY driven by wider spread
Slide 10: Treasury & Securities Services
Treasury & Securities Services ($ in millions) Beginning in 2Q06, Corporate Trust is excluded from TSS for all periods Record net income of $316mm up 68% YoY and 21% QoQ Pre-tax margin of 32% Liability balances up 26% YoY; Assets under custody up 19% YoY Record revenue up 12% YoY driven by wider spr
Slide 11: Asset & Wealth Management
Asset & Wealth Management ($ in millions) 1 Actual numbers for all periods, not over/under 2 2Q06 & 1Q06 does not include the loans and deposits of BrownCo, which were both $3bn at the time of sale on November 30, 2005 Record net income of $343mm up 21% YoY Pre-tax margin of 34% Assets under managem
Slide 12: Corporate
Corporate Total Corporate ($mm) Treasury ($mm) 2 Actual numbers for all periods, not over/under Private Equity ($mm) Other Corporate ($mm) 1 Discontinued operations relate to the sale of select corporate trust businesses, with net income of $56mm in 2Q06, $54mm in 1Q06 and $57mm in 2Q05
Slide 13: Capital Strength
Capital Strength 1 Estimated for 2Q06 2 There is $7.1B remaining capacity from the $8B authorized by the Board in March 2006.
Slide 14: 2Q06 Summary Assessment
2Q06 Summary Assessment Record IB fees and solid markets results Very low wholesale and consumer credit costs Card results benefit from low bankruptcy losses Record revenue and earnings in Asset & Wealth Management and Treasury & Securities Services on strong underlying growth Retail Financial Servi
Slide 15: Comments on Outlook
Comments on Outlook Very favorable credit environment -- not expected to continue Wholesale and consumer net charge-off rates will eventually return to normalized levels Card: Given current economic conditions (i.e., low level of unemployment) and impacts of new minimum payment rules and change in b
Slide 16: Disclaimer
Disclaimer 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's management and are subject to significant risks and uncertainties. Actu