Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Investor Day (2022)
47 slides from Jp Morgan Chase &'s investor day presentation, 2022
Slide 1: Investor Day 2022: Corporate & Investment Bank
INVESTOR DAY | 2022 CORPORATE & INVESTMENT BANK FIRM OVERVIEW GLOBAL TECHNOLOGY CONSUMER & COMMUNITY BANKIN G INTERNATIONAL CONSUMER GROWTH INITIATIVES D> CORPORATE & INVESTMENT BANK COMMERCIAL BANKING JPMORGAN CHASE & Co. ASSET & WEALTH MANAGEMENT
Slide 2: Topics for discussion
Topics for discussion ◼ Financial overview CIB Overview ◼ Positioning for growth ◼ Industry-leading global franchise Markets ◼ Client-centricity driving our leadership position ◼ Scale and competitiveness in electronic markets ◼ Overview and unique value proposition Payments ◼ Strong financial
Slide 3: Since the formation of the CIB, we have consistently delivered strong financial performance
Since the formation of the CIB, we have consistently delivered strong financial performance and remain the #1 CIB franchise REVENUE ($B) NET INCOME ($B) CAPITAL ($B) ROE1 OVERHEAD RATIO 52% 164% 77% 800bps 1600bps 25% 52 21 83 17% 65% 23% 34 16% 49% Global, complete, 47 8 diversified, and
Slide 4: Since 2017, our market share has grown across all businesses and regions
Since 2017, our market share has grown across all businesses and regions, while maintaining expense discipline and operating leverage Significant market share improvements between 2017 and 20211… …enabled strong financial results2 GLOBAL INVESTMENT BANKING Revenue Expense Net Income 180bps 130bp
Slide 5: We've delivered strong results at returns above the firmwide cost of capital
We’ve delivered strong results across our businesses at returns above the firmwide cost of capital NOT TO SCALE Corporate & Investment Bank ROE 15% 16% 14% 20% 25% 40% 80 $80B $80B $83B 35% 70 60 Capital $70B $70B 26% 30% 22% 20% 25% 50 17% 40 Heritage TSS ROE 15% 20% 30 12% 19% 15% Heritage IB ROE
Slide 6: Expense growth was mainly driven by business volume / revenue growth and investments
Expense growth was mainly driven by business volume / revenue growth and investments Adjusted Expense1 (2019 – 2022 Market Dependent, $B) ~27 2022 Total Investment Spend $3.8B 25.1 0.7 Market 1.3 Technology Investments2 $3.1B 0.1 Dependent ◼ CIB Technology $2.1B 2.4 22.1 0.5 ◼ Enterprise Technology
Slide 7: Our technology and product investments are opening up new growth opportunities
Our technology and product investments are opening up new growth opportunities and strengthening our leadership position We continue to increase our technology and product investment spend... …to drive business growth, advance strategic platforms and invest in AI/ML (select examples) Investment Bank
Slide 8: We have supported significant volume growth with modest increases to operational expense
We have supported significant volume growth with modest increases to operational expense We have driven efficiency at scale1… …while controlling our costs Technology Run The Bank expense2 Cash Payments Cash Equities Operations direct expense Annual payment Annual cash equities transaction volumes 47
Slide 9: Together our businesses enable us to bring a holistic set of solutions to our clients
Together our businesses enable us to bring a holistic set of solutions to our clients CIB clients served by 3+ CIB businesses (out of 4)1 INVESTMENT BANKING Delivering 79% 80% synergy and MARKETS connectivity PAYMENTS across clients Top 200 Financial Institution clients Top 200 Corporate clients ⧫ C
Slide 10: Global Investment Banking achieved record fees in 2021
Investment Banking Global Investment Banking achieved record fees in 2021, and delivered market share of 9.5% Ranked #1 by Investment Banking fees for over a decade Continued strong leadership position ■ Industry wallet ($B) ◆ Market share ■ Industry wallet (global) ($B) ◆ JPM market share (global)
Slide 11: We are focused on closing product and coverage gaps, and capturing new growth opportunities
Investment Banking We are focused on closing product and coverage gaps, and capturing new growth opportunities to gain market share Consistently targeting top positions across all products and sectors Focusing on four key strategic pillars Wallet mix by product Wallet mix by sector ◼ Deepen/broaden
Slide 12: Our Payments business has grown significantly despite rate headwinds
Payments Our Payments business has grown significantly despite rate headwinds Revenue ($B)1,2 Focus areas for deep-dive discussions 10.3 ✓ World’s largest payments franchise, occupying a unique place in the payments industry 9.1 9.9 excluding 0.4 gains on equity Fees investments Targeting double-dig
Slide 13: We have maintained our position as the leading Markets franchise
Markets We have maintained our position as the leading Markets franchise Revenue ($B)1 Focus areas for deep-dive discussions 27.4 ✓ Continue to strengthen our industry leadership by deepening relationship with clients 18.5 ✓ Uniquely positioned to capture secular growth of large institutional client
Slide 14: Securities Services has achieved both record revenue and assets under custody
Securities Services Securities Services has achieved both record revenue and assets under custody Our Clients Our Business By the Numbers Custody & Fund Services AUC ($T) DEPOSITS ($B)1 ◼ Alternatives ◼ Custody 42% 52% ◼ Fund ◼ Middle Office Asset Managers Services 33 ◼ ETFs 216 23 142 Trading S
Slide 15: We have a strategy to deliver growth for our business and clients
Securities Services We have a strategy to deliver growth for our business and clients, now and in the future Scale & Efficiency Comprehensive Client Solutions Investing for the Future Optimizing and streamlining Delivering products and services to Addressing client needs across the technology and op
Slide 16: Fusion: A unified data experience across our clients' investment journey
Securities Services Fusion: A unified data experience across our clients’ investment journey Fusion provides data ✓ Complete management, reporting and analytics solutions across the investment lifecycle, enabling institutional clients to generate investment and operational alpha 15
Slide 17: We maintain 16% ROE outlook with approximately 25% more capital
We maintain 16% ROE outlook with approximately 25% more capital Adjusted ROE (2019 – Outlook)1 9.9% 24.8% Market 24.6% Dependent (2.0%) 3.1% (0.6%) Inc. legal expense Drivers Potential Headwinds / Tailwinds ~16% 15.5% Increased market share Increase market share 14.5% Elevated capital markets
Slide 18: Topics for discussion
Topics for discussion ◼ Financial overview CIB Overview ◼ Positioning for growth ◼ Industry-leading global franchise Markets ◼ Client-centricity driving our leadership position ◼ Scale and competitiveness in electronic markets ◼ Overview and unique value proposition Payments ◼ Strong financial
Slide 19: We continue to grow by being complete and delivering client excellence
We continue to grow by being complete and delivering client excellence We remain the leading global Markets franchise… … with sustained growth #1 Joint #1 #1 $27.4B 12.2% Revenue Market Share FICC Equities Research 48% vs FY17 160bps vs FY17 …and continued client excellence Multi-asset counterpa
Slide 20: Our #1 position today is stronger than ever
Our #1 position today is stronger than ever, as we captured opportunities and closed gaps We remain the market leader… … by improving product and client market share… … and closing gaps in key focus areas Industry Wallet1 ($B) Share of Wallet ■ 2017 ■ 2021 Share of Wallet ■ 2017 ■ 2021 NOT TO SCALE
Slide 21: There is further growth from deepening client relationships and capturing secular trends
There is further growth from deepening client relationships and capturing secular trends We are investing to continue deepening relationships across our client base… Advanced data and analytics Innovative solutions Client-facing technology to provide clients the right content and pricing, to meet cl
Slide 22: We continuously optimize our capital footprint to deliver growth and strong returns
We continuously optimize our capital footprint to deliver growth and strong returns Even with a higher capital base… …we expect to earn above our cost of capital Markets Capital NOT TO SCALE 2022 ROE (%) NOT TO SCALE Cost of capital Marginal ROE Fully loaded ROE 2017 Growth-oriented Methodology 2022
Slide 23: We are investing to lead in newer market structures and electronic protocols
We are investing to lead in newer market structures and electronic protocols Foundational capabilities to enhance competitiveness Infrastructure Scalability Workflow Automation Organization Agility Market Structure ✓ Process more volumes with stability ✓ Improve algos with structured datasets ✓ Data
Slide 24: We have a track-record of being disciplined with expenses
We have a track-record of being disciplined with expenses Historical revenue & expense CAGR Expense breakdown1 NOT TO SCALE 2017-21 CAGR (ex. Income neutral) Total Expense (ex. Income neutral) 2017-21 CAGR Total +3.6% +9.3% +7.2% Volume / Revenue Related +5.7% Investments +3.6% Structural +1.4% Reve
Slide 25: Our strategy sets us up for continued success
Our strategy sets us up for continued success 1 Deepen relationships across client base 2 Capture secular growth with large institutional clients and in private alternative assets 3 Dynamically deploy capital to optimize returns 4 Innovate and lead, as market structure evolves and electronification
Slide 26: Topics for discussion
Topics for discussion ◼ Financial overview CIB Overview ◼ Positioning for growth ◼ Industry-leading global franchise Markets ◼ Client-centricity driving our leadership position ◼ Scale and competitiveness in electronic markets ◼ Overview and unique value proposition Payments ◼ Strong financial
Slide 27: J.P. Morgan Payments overview
J.P. Morgan Payments overview Key 2021 firm-wide metrics $9.9B ~50/50 29k $800B $3.4B Revenue1 NII / NIR split Clients (excl. SMB2) Average deposits PTI1 Client segments Business segments LOBs Corporates (50% of revenue) Treasury Services (TS) (84% of revenue) Corporate & Investment Bank (60% of rev
Slide 28: We aspire to occupy a unique place in the payments industry
We aspire to occupy a unique place in the payments industry Scale Innovation Durable Differentiation Banks Fintechs ◼ Safety, scale, ◼ Focus on customer ◼ Massive scale and operational excellence around the world resilience, deep focus experience, flexibility to ◼ Leadership across existing and emer
Slide 29: We gained scale and market share in Treasury Services
We gained scale and market share in Treasury Services, offsetting deposit margin compression Firmwide Revenue 2017 - 2021 ($B) Leadership positions & growth 2021 2017 2021 Rank 0.1 0.0 TS global market share4 5.4% 7.2% #1 0.8 Treasury Services 2.8 Payments txn avg. value/day $7T $10T #1 2.7 10.3 Loc
Slide 30: We invested heavily in the business, but overall expense growth will decline
We invested heavily in the business, but overall expense growth will decline going forward Firmwide Expense outlook NOT TO SCALE Structural / Volume ◼ Expense associated with cost+ businesses expected to normalize New Products ◼ Treasury Services capabilities best in class ◼ Continued investment in
Slide 31: Our Payments business is enabled by a clear design of our technology stack
Our Payments business is enabled by a clear design of our technology stack Client Interaction Layer Data products – Integrated data model and lake Single Payment API Digital (J.P. Morgan Access®) File Transmissions (Host to Host) Orchestration Layer Applications In-house (e.g., sub-ledgering, tokeni
Slide 32: Many of our new, cloud-native tech platforms are nearing completion and generate revenue
Many of our new, cloud-native, tech platforms are nearing completion and generate revenue Major platforms: Progress and target completion Platform spend (incl. decommissioning) outlook1 Graphite Express (Global Real Time Payments) Graphite ✓ Cumulative investments (2019-22): $90mm Express (Global Re
Slide 33: We see growth opportunities across our customer segments with concrete KPIs
# Details on following pages We see growth opportunities across our customer segments with concrete KPIs to track progress Focus areas Key targets 2021 Target ◼ Extend leadership with Financial Institutions and continue to bring efficiencies and innovation to Correspondent Banking 25% 30% SWIFT mark
Slide 34: We are rolling out unique vertically-aligned solutions with acquisitions and strategic investments
1 Deliver industry-specific solutions We are rolling out unique vertically-aligned solutions with acquisitions and strategic investments to accelerate our roadmap Healthcare Connected Cars Industry ecosystems we serve EV Charging Toll & parking Insurance Bill Patient Insurance payment premium Parts
Slide 35: Deliver end-to-end E-commerce capabilities: Marketplace
2 Deliver end-to-end E-commerce capabilities We are the only provider to offer end-to-end solutions to E-commerce marketplaces & sellers Client needs Existing capabilities Major investments In development (over next 2 years) All methods of payment and financing in the US and Europe Buyers Accept pay
Slide 36: VIDEO: MARKETPLACES
2 Deliver end-to-end E-commerce capabilities VIDEO: MARKETPLACES 35
Slide 37: Example of our new product development: Embedded Banking
2 Deliver end-to-end E-commerce capabilities Example of our new product development: Embedded Banking We re-configured existing …and deliver a seamless digital "widgets" to launch quickly… user experience… …that brings value to sellers and marketplaces Sellers Digital KYC / ...Enabling businesses to
Slide 38: Longer-term opportunity: European SMBs & Marketplaces
Longer-term opportunity: We see significant upside from serving European SMBs & Marketplaces Delivery model flow diagram Capabilities needed to address the market Real-time Omnichannel payment Purchasing settlement Local Bank methods – in person, in wallet Card account and online, including Tap on R
Slide 39: We believe there is a $5B revenue opportunity
We believe there is a $5B revenue opportunity Firmwide Revenue ($B) NOT TO SCALE Potential Tailwinds / Headwinds ~15 Onyx European expansion Faster growth in MS 9.9 Acquisitions / investments at attractive multiples Pace and evolution of rates and inflation Deposit attrition from Quantit
Slide 40: Longer-term opportunity: We are strategically investing in Onyx
Longer-term opportunity: We are strategically investing in Onyx to deliver industry-leading capabilities & future proof our business – all at a modest cost Today Metrics Peer-to-peer blockchain- Message Volume on Liink based network Liink By J.P. Morgan Network for information exchange to remove Fas
Slide 41: VIDEO: ONYX
VIDEO: ONYX 0 JPMorGAN CHASE & Co,
Slide 42: Closing thoughts
Closing thoughts… 1 Double-digit growth and high operating leverage 2 Consistent market share gains expected to continue, with growth in Merchant Services 3 Proven ability to execute complex technology modernization and development 4 Unique E-commerce platform solutions already live with additional
Slide 43: Topics for discussion
Topics for discussion ◼ Financial overview CIB Overview ◼ Positioning for growth ◼ Industry-leading global franchise Markets ◼ Client-centricity driving our leadership position ◼ Scale and competitiveness in electronic markets ◼ Overview and unique value proposition Payments ◼ Strong financial
Slide 44: We remain confident in the resilience of our business
We remain confident in the resilience of our business and are constantly optimizing our model with a focus on maintaining our leadership position Macro environment Market forces Competitive landscape Inflation Inflation Inflation Rates Geopolitics Digitization ESG Market structure War for talent Tra
Slide 45: Appendix
APPENDIX
Slide 46: Notes on non-GAAP financial measures
Notes on non-GAAP financial measures 1. The CIB provides certain non-GAAP financial measures. These measures should be viewed in addition to, and not as a substitute for, the CIB’s reported results. Adjusted ROE on page 2 is calculated as net income after preferred stock costs excluding credit reser
Slide 47: Notes on market share and rankings
Notes on market share and rankings 1. Source: Coalition Greenwich Competitor Analytics based on JPMorgan Chase’s internal business structure and revenues. Excludes the impact of Archegos in 2021 for select firms. Historical Coalition competitor revenues and industry wallet have been rebased to ensur