Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Q4 2012 Earnings Presentation
26 slides from Jp Morgan Chase &'s earnings presentation, Jan 16, 2013
Slide 1: Financial Results 4Q12
January 16, 2013 F I N A N C I A L R E S U L T S 4Q12
Slide 2: 4Q12 and full year 2012 financial highlights
4Q12 and full year 2012 financial highlights 1 See note 1 on slide 24 2 Independent Foreclosure Review 3 Assumes a tax rate of 38% 4 See note 4 on slide 24, and the Basel I Tier 1 capital and Tier 1 capital ratio on page 39 of the Firm’s 4Q12 earnings release financial supplement 4Q12 net income o
Slide 3: 4Q12 Financial results
4Q12 Financial results1 1 See note 1 on slide 24 2 Actual numbers for all periods, not over/under 3 See note 3 on slide 24 $ O/(U) 4Q12 3Q12 4Q11 Revenue (FTE)1 $24,378 ($1,485) $2,180 Credit costs 656 (1,133) (1,528) Expense 16,047 676 1,507 Reported net income $5,692 ($16) $1,964 Net income applic
Slide 4: Full year 2012 financial results
Full year 2012 financial results1 1 See note 1 on slide 24 2 Actual numbers for all periods, not over/under 3 See note 3 on slide 24 $ O/(U) FY2012 FY2011 FY2011 Revenue (FTE)1 $99,890 $99,767 $123 Credit costs 3,385 7,574 (4,189) Expense 64,729 62,911 1,818 Reported net income $21,284 $18,976 $2,30
Slide 5: Fortress balance sheet and returns
Fortress balance sheet and returns Firmwide total credit reserves of $22.6B; loan loss coverage ratio of 2.43%6 Global Liquidity Reserve of $491B7 Conservative capital structure $450B equity and long-term debt Over $700B of cash, high quality AFS securities and secured financings8 $1.2T
Slide 6: Consumer & Community Banking
Consumer & Community Banking1 Card, Merchant Services & Auto #1 credit card issuer in the U.S.9 #1 global Visa issuer based on consumer and business credit card sales volume10 #1 U.S. co-brand credit card issuer9 #3 global merchant acquirer11 #2 non-captive in new/recent used vehicles sold
Slide 7: Consumer & Community Banking: Consumer & Business Banking
Consumer & Community Banking Consumer & Business Banking 1 Actual numbers for all periods, not over/under 2 Includes checking accounts and Chase Liquid® cards (launched 2Q12) Consumer & Business Banking net income of $756mm, down 5% YoY Net revenue of $4.3B, down 1% from the prior year Credit
Slide 8: Consumer & Community Banking: Mortgage Banking
Consumer & Community Banking Mortgage Banking Production pretax income of $789mm, up $628mm YoY, reflecting lower repurchase losses and higher volumes Realized repurchase losses of $196mm Reduction of repurchase liability of $249mm Net servicing-related revenue of $618mm, down 14% YoY Servi
Slide 9: OCC and Federal Reserve Independent Foreclosure Review settlement
Office of the Comptroller of the Currency (OCC) and the Federal Reserve Independent Foreclosure Review settlement Settlement overview and impact to Chase $8.5B global settlement announced between several servicers and the OCC and the Federal Reserve Settlement satisfies all requirements under th
Slide 10: Card, Merchant Services & Auto
Net income of $840mm, down 20% YoY Net income, excluding the reduction of the allowance for loan losses4, up 13% YoY Revenue of $4.8B, flat YoY Credit costs of $1.3B, compared with $1.1B in the prior year Expense of $2.2B, up 7% YoY, driven by the write-off of intangible assets associated
Slide 11: Corporate & Investment Bank
Corporate & Investment Bank1 Net income of $2.0B on revenue of $7.6B DVA loss of $567mm ROE of 17%, 20% excl. DVA Banking IB fees of $1.7B, up 54% YoY, including record debt underwriting fees – Ranked #1 in FY2012 Global IB fees Treasury Services revenue of $1.1B, up 1% YoY Lending rev
Slide 12: Corporate & Investment Bank – Key metrics & leadership positions
Corporate & Investment Bank – Key metrics & leadership positions Comments Corporate & Investment Bank 47% international revenue for FY2012; FY2012 up 6% excl. DVA International deposits increased 29% from FY2010, driven by growth in Asia International loans up 50% since FY2010 Gross CIB reve
Slide 13: Commercial Banking
Commercial Banking1 Net income of $692mm, up 8% YoY Record revenue of $1.7B, up 3% YoY Record EOP loan balances up 14% YoY and 4% QoQ; record Middle Market loans up 14% YoY 10th consecutive quarter of increased loan balances; 11th for Middle Market Average client deposits of $199.3B, flat
Slide 14: Asset Management
4Q12 3Q12 4Q11 Revenue $2,753 $294 $469 Private Banking 1,441 76 229 Institutional 729 166 171 Retail 583 52 69 Credit costs $19 $5 ($5) Expense 1,943 212 191 Net income $483 $40 $181 Key drivers/statistics ($B)2 EOP equity $7.0 $7.0 $6.5 ROE3 27% 25% 18% Pretax margin4 29 29 22 Assets under managem
Slide 15: Corporate/Private Equity
Private Equity Private Equity net income was $50mm Private Equity portfolio of $8.1B 5.2% of stockholders’ equity less goodwill Treasury and CIO Treasury and CIO net income was a loss of $157mm Negative NII of $388mm due to low rates and limited reinvestment opportunities Partially offse
Slide 16: Net interest income and margin trend
Both Firmwide and Core NIM lower (3 bps and 7 bps, respectively) QoQ Lower loan yields Lower yields on investment securities Limited reinvestment opportunities Higher balances in Fed funds sold and certain secured financings3 Core net interest margin1 1 See notes 1 and 6 on slide 24 2 The
Slide 17: Outlook
Outlook Consumer & Community Banking Consumer & Business Banking Given low interest rates and the current curve, deposit spread compression will negatively impact annual net income by $400mm +/- in 2013. This will be partially offset by deposit balance growth Mortgage Banking Total quarterly
Slide 18: Appendix
Agenda Page 17 Appendix 17 F I N A N C I A L R E S U L T S
Slide 19: Peripheral European exposure
Peripheral European exposure1 Securities and trading Lending AFS securities Trading Derivative collateral Portfolio hedging Net exposure Spain $3.1 $0.5 $4.8 ($3.3) ($0.4) $4.7 Sovereign 0.0 0.5 (0.0) 0.0 (0.1) 0.4 Non-sovereign 3.1 0.0 4.8 (3.3) (0.3) 4.3 5 Italy $2.8 $0.0 $12.8 ($2.7) ($5.3) $7.6
Slide 20: Superstorm Sandy update
Superstorm Sandy update Key takeaways No event of this past year better captures both the spirit and the promise of our Firm to support our communities than our response to Superstorm Sandy Our employees responded with the resources, skills and passion of the entire enterprise to ensure that our
Slide 21: Consumer credit – Delinquency trends
Note: Prime Mortgage excludes held-for-sale, Asset Management and Government Insured loans 1 Excluding purchased credit-impaired loans 2 Credit card delinquencies prior to January 1, 2010 included certain reclassification adjustments that assumed credit card loans securitized by Card Services remain
Slide 22: Real Estate Portfolios and Card Services – Coverage ratios
Real Estate Portfolios and Card Services – Coverage ratios Real Estate Portfolios and Card Services credit data ($mm) O/(U) Adjusted Adjusted 4Q121 3Q122 4Q11 4Q11 Real Estate Portfolios (NCI): Net charge-offs ($) $520 $595 $876 ($356) NCO rate (%) 1.74% 1.93% 2.58% (84)bps Allowance for loan losses
Slide 23: Firmwide – Coverage ratios
14,841 13,441 11,928 11,005 9,993 10,605 10,068 11,370 10,720 32,266 29,750 28,520 28,350 27,609 25,871 23,791 22,824 21,936 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 0% 100% 200% 300% 400% 500% 600% 4Q12 3Q12 JPM 1 JPM 1 Peer avg. 3 Consumer LLR/Total lo
Slide 24: Investment banking league table rankings
Source: Dealogic. Global Investment Banking fees reflects ranking of fees and market share. Remainder of rankings reflects transaction volume rank and market share. Global announced M&A is based on transaction value at announcement; because of joint M&A assignments, M&A market share of all participa
Slide 25: 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 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 with the
Slide 26: 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