Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Q2 2010 Earnings Presentation
21 slides from Jp Morgan Chase &'s earnings presentation, Jul 15, 2010
Slide 1: Financial Results 2Q10
FINANCIAL RESULTS 2Q10 July 15, 2010
Slide 2: 2Q10 Financial highlights
2Q10 Financial highlights 2Q10 Net income of $4.8B; EPS of $1.09; revenue1 of $25.6B Results include the following significant items: $ $ in in millions, millions, excluding excluding EPS EPS Net Income EPS Firmwide reduction to loan loss allowance $1,458 $0.36 U.K. bonus tax (550) (0.14) Quar
Slide 3: 2Q10 Financial results
2Q10 Financial results1 $ $ in in millions, millions, excluding excluding EPS EPS $ O/(U) 2Q10 1Q10 2Q09 1 Revenue (FTE) $25,613 ($2,559) ($2,096) 1 Credit Costs 3,363 (3,647) (6,332) Expense 14,631 (1,493) 1,111 Reported Net Income $4,795 $1,469 $2,074 Net Income Applicable to Common $4,363 $1,389
Slide 4: Investment Bank
Investment Bank $ $ in in millions millions Net income of $1.4B on revenue of $6.3B $ O/(U) ROE of 14% 2Q10 1Q10 2Q09 IB fees of $1.4B down 37% YoY Revenue $6,332 ($1,987) ($969) Ranked #1 YTD in Global Investment Banking Investment Banking Fees 1,405 (41) (834) Fees Fixed Income Markets 3,5
Slide 5: Retail Financial Services — drivers
Retail Financial Services — drivers Retail Average deposits of $337.8B down 3% YoY and up 1% QoQ: Retail Banking Banking ($ ($ in in billions) billions) YoY decline largely due to the maturation of high rate WaMu CDs 2Q10 1Q10 2Q09 Deposit margin expansion YoY and QoQ reflects disciplined Key
Slide 6: Retail Financial Services
Retail Financial Services $ $ in in millions millions $ O/(U) Retail Financial Services net income of $1.0B compared with 2Q10 1Q10 2Q09 $15mm in the prior year Retail Financial Services Net income $1,042 $1,173 $1,027 Retail Banking net income of $914mm down 6% YoY: 1,2 ROE 15% (2)% - 1 Total
Slide 7: Home Lending update
Home Lending update Key 1 Key statistics statistics1 Overall Overall commentary commentary 2Q10 1Q10 2Q09 Losses in 2Q are down QoQ resulting from the EOP owned portfolio ($B) improvement in delinquencies through 1Q and Home Equity $94.8 $97.7 $108.2 moderating loss severities Prime Mortgage2 57.8
Slide 8: Card Services
Card Services1 $ $ in in millions millions Net income of $343mm compared with a net loss of $672mm in the prior year $ O/(U) 2Q10 1Q10 2Q09 Credit costs of $2.2B include a reduction of $1.5B Revenue $4,217 ($230) ($651) to the allowance for loan losses, reflecting a lower Credit Costs 2,221 (1,2
Slide 9: Commercial Banking
Commercial Banking1 $ $ in in millions millions Net income of $693mm up 88% YoY $ O/(U) Average loan balances down 12% YoY and 1% QoQ 2Q10 1Q10 2Q09 due to continued low client demand Revenue $1,486 $70 $33 Middle Market Banking 767 21 (5) Average liability balances of $136.8B up 29% YoY Comme
Slide 10: Treasury & Securities Services
Treasury & Securities Services $ $ in in millions millions Net income of $292mm down 23% YoY and up $ O/(U) 5% QoQ Pretax margin of 25% 2Q10 1Q10 2Q09 QoQ increase due to seasonal activity in Revenue $1,881 $125 ($19) securities lending and depositary receipts Worldwide Securities Services 955
Slide 11: Asset Management
Asset Management $ $ in in millions millions Net income of $391mm up 11% YoY $ O/(U) Pretax margin of 32% 2Q10 1Q10 2Q09 Revenue of $2.1B up 4% YoY due to the effect of Revenue $2,068 ($63) $86 higher market levels, net inflows to products with Private Bank 695 (3) 55 higher margins and higher
Slide 12: Corporate/Private Equity
Corporate/Private Equity Net Net Income Income ($ ($ in in millions) millions) Private Equity $ O/(U) Private Equity gains of $75mm 2Q10 1Q10 2Q09 Private Equity portfolio of $8.1B (6.6% of Private Equity $11 ($44) $38 shareholders’ equity less goodwill) Corporate 642 469 (193) Corporate Net Inc
Slide 13: Capital Management
Capital Management $ $ in in billions billions 2Q10 1Q10 2Q09 Tier 1 Capital1,2 $137 $131 $122 Tier 1 Common Capital1,3 $108 $104 $97 Risk-Weighted Assets1 $1,131 $1,147 $1,260 Total Assets $2,014 $2,136 $2,027 Tier 1 Capital Ratio1,2 12.1% 11.5% 9.7% Tier 1 Common Ratio1,3 9.6% 9.1% 7.7% Firmwide
Slide 14: Outlook
Outlook Retail Retail Financial Financial Services Services Card Card Services Services Home Lending loss guidance: Estimated full-year average outstandings Prior quarter loss guidance — Quarterly losses expected to decline 15%+/- in 2010, possibly to an could reach: average of $140B+/- by the
Slide 15: Summary comments on regulatory reform
Summary comments on regulatory reform We recognize there are many positive aspects of pending regulation Higher capital and liquidity requirements Resolution authority Systemic risk oversight We also recognize that there are challenges Many uncertainties (hundreds of rules to be written)
Slide 16: Agenda
Agenda Page Appendix 15 FINANCIAL RESULTS 15
Slide 17: Consumer credit — delinquency trends
Consumer credit — delinquency trends Excluding purchased credit-impaired loans Home Equity Home Equity delinquency delinquency trend trend ($mm) ($mm) Prime Prime Mortgage Mortgage delinquency delinquency trend trend ($mm) ($mm) $4,000 30+ day delinquencies 30 – 150 day delinquencies $6,500 30+ day
Slide 18: Coverage ratio remains strong
Coverage ratio remains strong ($ ($ in in millions) millions) Loan Loss Reserve/Total Loans1 Loan Loss Reserve Loan Loss Reserve/NPLs1 6.00% 500% Nonperforming Loans 5.00% 400% 31,602 35,836 30,633 38,186 4.00% 29,072 300% 27,381 3.00% 200% 23,164 19,052 2.00% 13,246 100% 14,785 17,767 17,564 17,050
Slide 19: IB League Tables
IB League Tables League League table table results results For YTD June 30, 2010, JPM ranked: YTD Jun 2010 2009 #1 in Global IB fees Rank Share Rank Share #1 in Global Debt, Equity & Equity-related Based on fees: #1 in Global Equity & Equity-related Global IB fees 1 #1 7.9% #1 9.0% #1 in G
Slide 20: 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 21: Forward-looking statements
Forward-looking statements 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 unc