Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — 2006 Lehman Brothers Financial Services Conference
24 slides from Jp Morgan Chase &'s conference presentation, Sep 13, 2006
Slide 1: Jamie Dimon, Chief Executive Officer, 2006 Lehman Brothers Financial Services Conference
Jamie Dimon Chief Executive Officer S E P T E M B E R 1 3 , 2 0 0 6 2006 Lehman Brothers Financial Services Conference
Slide 2: 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
Slide 3: Agenda
Agenda Overview of firm and lines of business Credit profile Progress since merger Conclusions
Slide 4: JPMorgan Chase Financial Results and Financial Strength
Investment Bank 1689 Retail Financial Services 1749 Card Services 1776 Commercial Banking 523 Treasury & Securities Services 578 Asset & Wealth Management 656 Slice 7 Slice 8 Slice 9 Slice 10 Slice 11 Slice 12 Slice 13 Slice 14 Slice 15 Slice 16 JPMorgan Chase Financial Results1 ($mm) 2 Excludes Cor
Slide 5: Investment Bank Financial Results
Investment Bank Financial Results ($mm) 1H06 Revenue By Business 1H06 Leadership Positions #1 Global Syndicated Loans2 #1 Global Credit Derivatives3 #1 U.S Long-Term Debt2 #2 Global Interest Rate Swaps/Options3 #2 Global Debt, Equity and Equity-Related2 #2 EMEA IPOs2 #3 Global M&A Announced2 #5 U.S.
Slide 6: Investment Bank Capital Markets Revenue
Investment Bank Fixed Income Markets Equity Markets Column 3 Column 4 Column 5 Column 6 Column 7 Column 8 Column 9 Column 10 Column 11 Column 12 Column 13 Column 14 Column 15 Column 16 1Q03 2193 439 2Q03 2389 394 3Q03 1632 347 4Q03 1557 346 1Q04 2330 674 2Q04 1815 194 3Q04 1115 455 4Q04 1530 243 1Q0
Slide 7: Investment Bank Average Loans and IB Fee Market Share
Investment Bank Total Loans Average HTM Loans Average HFS Loans Total IB Fees Mkt Share Column 4 Column 5 Column 6 Column 7 Column 8 Column 9 Column 10 Column 11 Column 12 Column 13 Column 14 Column 15 Column 16 2000 112 0.119 2001 96 0.122 2002 79 0.115 2003 0 53.519 4.2 0.128 2004 0 41.804 6.1 0.1
Slide 8: Retail Financial Services Financial Results
Retail Financial Services Financial Results ($mm) 1H06 Key Statistics1 2Q06 Leadership Positions Invest in distribution network Branches, ATMs, salespeople Continue to strengthen sales management Focus on productivity and cross-sell Conversions - TriState & Bank of NY branches Partnerships with IB a
Slide 9: Retail Financial Services - Old Branding
Retail Financial Services - Old Branding
Slide 10: Retail Financial Services - New Branding
Retail Financial Services - New Branding Recognize and Invest in the Value of Distribution
Slide 11: Card Services Financial Results
Grow high ROO businesses Improve new account acquisition profitability Investment in growth initiatives Retail branch cross-sell Service-to-sales/card activation program Judgmental lending Build brand awareness through advertising and innovation Focus on expense effectiveness Strategic acquisitions/
Slide 12: Card Services ROO Performance versus Peers
2001 2002 2003 2004 2005 1H06 Line 8 Line 9 Line 10 Line 11 Line 12 Line 13 Line 14 Line 15 Chase 0.0214 0.0251 0.0176 0.0208 0.0221 0.0412 Citi 0.033 0.038 0.0384 0.0395 0.0312 0.0394 Discover 0.0228 0.0236 0.0215 0.0258 0.0195 0.0434 American Express 0.034 0.052 0.0426 0.0433 0.0461 0.0575 Bank of
Slide 13: Commercial Banking Financial Results
Commercial Banking Financial Results ($mm) 1H06 Revenue By Product 1H06 Key Statistics1 Increase market share through growth in prospect conversion and cross-sell penetration Manage credit underwriting and portfolio to outperform peer average Enhance product and sales training Lending 650 Treasury S
Slide 14: Treasury & Securities Services Financial Results
Treasury & Securities Services Financial Results ($mm)1 1H06 Key Statistics2 Priorities Leadership Positions 1 Results reflect the absence of discontinued operations related to the exchange of the corporate trust business to The Bank of New York. Grow international market share Attain Best in Class
Slide 15: Asset & Wealth Management Financial Results
Private Bank 910 Institutional 884 Retail 888 Private Client Services 522 Slice 6 Slice 7 Slice 8 Slice 9 Slice 10 Slice 11 Slice 12 Slice 13 Slice 14 Slice 15 Slice 16 Asset & Wealth Management Financial Results ($mm) 1H06 Revenue By Client Segment 1H06 Key Statistics Sustain superior investment pe
Slide 16: Corporate Results
Corporate Total Corporate ($mm) Private Equity ($mm) 1 Discontinued operations relate to the sale of select corporate trust businesses, with net income of $110mm in 1H06, and $217mm in 2005. Avg Portfolio Size Treasury NII Column 3 Column 4 Column 5 Column 6 Column 7 Column 8 Column 9 Column 10 Colu
Slide 17: Credit Overview: Allowance, Net Charge-offs and Credit Costs
Note: All ratios exclude impact of loans held for sale 1 Card is shown on a managed basis (excludes impact of securitizations) Comments on Credit Allowance for loan losses/loans June 30, 2006 Wholesale 1.67% Retail Financial Services 0.69% Card Services 4.37% ($ in millions) 1H06 2005 Net Charge-off
Slide 18: Consumer Sub-Prime Lending
1st Qtr Prime 325 Sub-Prime 28 Slice 6 Slice 7 Slice 8 Slice 9 Slice 10 Slice 11 Slice 12 Slice 13 Slice 14 Slice 15 Slice 16 Consumer Sub-Prime Lending1 Operate in a limited way in sub-prime space Established limits for each portfolio which are reviewed annually Mortgage portfolio is clearly the do
Slide 19: Sub-Prime Real Estate Risk Profile
Sub-Prime Real Estate Risk Profile Credit performance continues to be favorable compared to historical levels The highest risk segment with FICO scores below 600 and LTV's greater than 90% is only 1% of the sub-prime real estate portfolio $13B of higher-risk sub-prime real estate, or 4% of total man
Slide 20: Home Equity Risk Profile
Home Equity Risk Profile Credit performance continues to be favorable compared to historical levels The highest risk segment with FICO scores below 650 and LTV's greater than 90% is only 1% of the home equity portfolio $18B of higher-risk home equity, or 5% of total managed consumer portfolio Net ch
Slide 21: Merger Milestones
7/05 - Chase Card conversion 9/05 - Texas market integration 1/06 - 8/06 - Strategic Data Center server migrations 2/06 - 3/06 - Migration of consumer Card Member Services, business card and BankOne.com customers to Chase online platform 7/06 - Tri-State teller workstation conversion Merger Mileston
Slide 22: Adjusted Firmwide Expense
Adjusted Firmwide Expense1 (mm) Noncompensation expense Compensation Expense Stack 3 Stack 5 Stack 6 Stack 7 Stack 8 Totals (invisible) Stack 9 Stack 10 Stack 11 Stack 12 Stack 13 Stack 14 Stack 15 Stack 16 3Q04 7501 4477 3024 4Q04 7343 4556 2786 1Q05 7052 4049 3002 40 2Q05 7322 4329 2992 60 3Q05 71
Slide 23: Organic Growth over Past Year
2% increase in avg. managed outstandings3 9% increase in charge volume3 20% organic growth in new accounts 18% increase in merchant processing volume Organic Growth over Past Year Investment Bank1 Retail Financial Services2 Card Services2 Commercial Banking2 Treasury & Securities Services2 Asset & W
Slide 24: Conclusions
Balance sheet continues to strengthen Solid understanding of and disciplined approach to credit Good expense control while investing for growth Strong management team World-class franchises Tremendous progress on conversions, technology, branding Still a work in progress Conclusions
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